Republic of the Philippines

Tarlac State University

COLLEGE OF BUSINESS AND ACCOUNTANCY
Department of Financial Management
Tarlac City

ESTEPA, DEXTER NOLI GRANIL FINMAN E3

FM-4A WF – 2:30-4:00 PM

1. How is a country’s economic well-being enhanced through free international trade in goods
and services?
A move to free international trade would be extremely beneficial to a small country like
the Philippines. I agree that free trade has a lot of advantages to offer for a small country like the
Philippines. Such as increase of economic growth because people will buy more because of better-
quality products - people or the consumers will benefit from lower costs especially cheaper import
prices, and it drives the economic growth of one's country. To sum it up is free trade will have an
effect and impact for both producers and consumers. Free international trade in goods and services
would allow consumers and producers to make decisions based on actual costs of goods rather than
artificial prices set by government policy. In this case, consumers and producers will make their
choices based on the costs, prices determined by the government because of free trade. But how
about our local producers they might affected with it. For example, domestic or local organizations,
firms, and industries might be uncompetitive and will lose because of cheaper imports, they might
suffer from this. We do not want to happen that our local producers together with the products that
are being offered for the Filipinos will suffer. We should support local. These products are owned
by our countrymen. When we support local it also enhances the local economy, instead of
increasing the wealth of other country why not invest in our own, its ours. On the other hand, we
cannot control things because in terms of pricing, people will still choose cheaper products. What
we should do is to give opportunity to our own products, we can still purchase from other country,
but it doesn't mean that we need to forget our own. It is good that we have a lot of choices but
supporting local will strengthen our communities.

2. What economic roles do multinational corporations (MNCs) play?

Multinational corporations (MNCs) are businesses that manufacture, distribute, and market
in more than one country. These corporations have made significant contributions to the global
economy's development. It can help a developing country by increasing investment, increase in
employment, and income of one’s country. First, increase in investment. Investment influences
productive capacity of the economy and the rise in investment increases economic growth, but if
firms gain more sales and profit, they are willing to reinvest this in further investment. investment
is important for improving productivity and increasing the competitiveness of an economy. An
economy can enjoy high levels of consumption without investment, but this creates an unbalanced
economy. There will tend to be a current account deficit and little investment in future growth
prospects. Next, increase in employment. Any corporation that exists in one country needs a
manpower. Employment benefits the economy by increasing the gross domestic product, or GDP.
We are all aware that a country must have a positive image when it comes to GDP because it
 provides information about the size of the economy and how well it is performing. For example, if
I am employed, I am being paid by my employer and this will result me having money to spend in
the society, to buy food, have clothing and more. From an economic standpoint, multinational
corporations are responsible for economic stability and growth through offering important services,
products, as well as taxes that directly benefit the society.

In conclusion, MNCs can also help developing countries like Philippines through finance,
investments, and employment in its economy.

3. Why would it be useful to examine a country’s balance-of-payment data?

For a country's economic status in terms of privilege and power and financial status, it
would be beneficial to look at their balance of payments. The balance of payments is a useful tool
for evaluating an economy's international performance. A country's foreign exchange rate can be
measure by its balance of payments, which could lead to potential trading and investing in that
country. In addition, s country's performance in international economic competition can be assessed
using balance of payments data. This information is also useful in predicting a country's market
potential in the future. For people to know if the country is in deficit or surplus, the balance of
payments needs to be reported on regularly. If a country has a deficit, it means that it imports more
goods, services, and capital than it exports. On the other hand, surpluses occur when exports exceed
imports. Basically, information on the supply and demand of the country's currency is provided by
the balance of payments. As a result, fiscal and trade policies can be formulated that consider the
country's economic interactions with other nations.
In conclusion, for a given period of time, it looks at all of the exports and imports of goods
and services that took place. It helps the government to analyze export growth potential for a
particular industry and formulate policies to support that expansion or growth.