ZEBI MAGNOLIA FAWWAZ

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IR-221SP

INTERNATIONAL BUSINESS

CRITICAL THINKING AND DISCUSSION QUESTION

1. Merchantilism is a bankrupt theory that has no place in the modern world. Discuss
 I think it is a bakrupt theory and there is no place for mercantilism in the modern
business scenario. Because, the nation wealth is managed by the hands of private
businesses not the government. Private people do business with government
support and pay taxes for it.

2. Is free trade fair? Discuss!

 Free trade is a system of trade policy that allows traders to act and or transact
without interference from government. According to the law of comparative
advantage the policy permits, trading partners mutual gains from trade of goods
and services. Bu there is Fair trade. It refers to exchanges, the terms of which meet
the demands of justice. In my opinion free trade isn’t fair, because the product can
be manufactured in the developed country at a lower cost and the same product
needs higher manufacturing costs in developing countries. Developing countries
should also depend on other nations for every product and service in this situation.
This can be a disadvantage to those countries.

3. Union in developed nation often oppose imports from low-wage countries and advocate
trade barriers to protect jobs from what they often characterize as “unfair” import
competition. Is such competition “unfair”? Do you think that this argument is in the best
interests of (a) the unions, (b) the people they represent, and/or (c) the country as a whole?
 Low-wage nations produce similar items for less than a developing nation could.
The explanation that unions in developing nations restrict imports from low-wage
nations is the expansion in the rivalry. With a comparable item at a lower cost, the
purchasers will clearly pick the less expensive item. This is awful for businesses
 in developing countries. When a business doesn't progress nicely, joblessness
increases and at last, no one will get an advantage. Regardless of whether we
believe this to be "unfair" relies upon what viewpoint we take. Obviously, a low-
wage nation imagines this is ordinary since they are the ones profiting the most. If
by chance they couldn't beat their opposition, they would not have a high
employment rate. Then again, on the off chance that we are taking a gander at the
circumstance as a creating country, we would be extremely restricted. Obviously,
the immediate reaction as a customer would be fulfilled, however, this constant
minimal effort rivalry would kill business and increase joblessness, thus will lead
to a weaker economy. In spite of the fact that the customers may get direct profit,
generally speaking, it isn't to the best interest of the unions, the people, or the
country as a whole.

4. What are the potential costs of adopting a free trade regime? Do you think government
should do anything to reduce these costs? What?
 Free trade has helped in the general monetary upliftment of nations. USA based
organizations used to include their production lines inside the nations. Organized
commerce approaches have redistributed the significant works onboard in nations
like China & Bangladesh. Free trade policies have helped in the general addition
of the employments, generation and by and large advancement of countries. The
exchange made difficulties to the specialist and business that made local
challenges and brought mechanical change. The dynamic economy has made new
openings and new businesses giving chances to the jobless. In my opinion, the
government should make a suitable environment for the free trade policies so it
can upgrade and create advancement for the overall infrastructure, trading, and
centre around the upliftment of the individual's life. The import expense can be
decreased on the significant necessities things for everyday life.

5. Reread the Country Focus “Is China a Neomercantilist Nation?”

 Is China a neo-mercantilist nation that is purposely demoralizing imports and
urging sends out so as to develop its exchange surplus and collect remote trade
holds, which may give it monetary power? The jury is out on this issue. Doubters
recommend that going ahead, the nation will have no real option except to build
its imports of items that it needs, for example, oil. They likewise note that China
started permitting the estimation of the yuan (China's money) to acknowledge
against the dollar in July 2005, yet at a moderate pace. In July 2005 one U.S.
dollar bought 8.11 yuan. By January 2012, the one dollar obtained 6.38 yuan, a
decay of 21 percent. Subsequently, China's exchange surplus has begun to
contract as fare development has eased back and imports have expanded. In 2011,
the surplus was $155 billion, down generously from the $290 billions of every
2008. While this recommends China's exchange surplus may have topped until
further notice, it is as yet a reason for worry in many created countries, and
especially the United States.