1. How could a higher level of inflation in Thailand affect Blades (assume U.

S
inflation remains constant)?

Answer: Blades had a decreasing demand for “Speedos”. A higher level of inflation will
affect the current account of Thailand would be expected to decrease and exports will
also decline.

2. How could competition from firms in Thailand and from U.S firms conducting
business in Thailand affect Blades?

Answer: As with a view of point of local firms they will be affected by the tax rates on
interest and dividends because the local investor or firms in Thailand would normally
invest with in the country due to the interest on taxes and dividends income are relatively
low. They will access their earnings from investing in foreign securities

Competitors in U.S firms the investors and other firms may decide to purchase securities
from other countries, rather purchasing Thailand securities the reason is that due to the
currency of   Thailand (Thai Baht) is continuously depreciating.

3. How could a decreasing level of national income in Thailand affect Blades?

 Answer: If the national income of Thailand declined, and causing the decline in demand
for imported goods which was manufactured by firms based in Thailand. Due to the
decrease in national income the current account of Thailand would also tends to decrease.

4. How could a continued depreciation of the Thai baht affect Blades? How would it
affect Blades relative to U.S exporters invoicing their roller blades in U.S dollars?

Answer: Continued depreciation of Thai baht affects the U.S exporters will increase their
demand from Thai baht as the U.S exporters are invoicing their roller blades in dollars.

5. If Blades increases its business in Thailand and experiences serious financial

problems, are there any international agencies that the company could approach for
loans or other financial assistance?

Answer: International Financial Corporation (IFC) is the international agency that would
approach for loans or assistance in financial crisis. It’s not only provides loans to
corporations but also purchase stocks thereby becoming part owner in some cases rather
than just a creditor .