RHOANNE

1. How do MNCs contribute to their host country?

Multinational advocates say they create high-paying jobs and technologically advanced goods in
countries that otherwise would not have access to such opportunities or goods.

The potential benefits of MNCs on host countries include:

• Provision of significant employment and training to the labor force in the host country

• Transfer of skills and expertise, helping to develop the quality of the host labour force

• MNCs add to the host country GDP through their spending, for example with local suppliers and
through capital investment

• Competition from MNCs acts as an incentive to domestic firms in the host country to improve
their competitiveness, perhaps by raising quality and/or efficiency

• MNCs extend consumer and business choice in the host country

• Profitable MNCs are a source of significant tax revenues for the host economy (for example on
profits earned as well as payroll and sales-related taxes)

2. Give one modality of MNCs and expound its mechanisms.

1. Foreign Direct Investment

International investment falls into two categories: International Portfolio Investment and Foreign Direct
Investment.

International financial investment – or international portfolio investment – is investment undertaken for

purely financial reasons, often on a short-term basis. It includes loans as well equity investment, i.e. the
acquisition of shares in a foreign company. In the latter case what we mean by financial or portfolio
reasons is that the equity share is not substantial enough to give the investors control or a long-lasting
interest in the management of the company they have invested in. Portfolio investment may be
undertaken at the national or international level according to whether the equity acquisition or the
loans are between institutions/ people belonging to the same country or to different countries.

Foreign Direct Investment- This is the type of investment that companies use to acquire substantial
assets abroad. FDI is therefore the defining modality of TNCs.

Inward FDI- investment for a specific country is the direct investment by foreign companies into that
country.

Outward FDI- the investment abroad by companies whose nationality is in the specific country under
consideration.

KAPITANA

1.)What is Hegemonic Stability Theory all about and How it shape the Hegemonic system?
In the second half of the 20. century the term of “Hegemonic Stability Theory “ was introduced by
political scientists such as Stephen Krasner, Robert Gilpin and Robert Keohane to explain the
mechanisms of the new economic world order that had been established after the Second World War.
[1] The main assumption of the theory that a stable liberal economic world order needs a hegemon was
explained with the examples of the British hegemony in the 18. and 19. century and with the example of
American hegemony in the postwar years of the second half of the 20. century.

1.)As Initiated by Charles P. Kindleberger the theory of hegemonic stability generally argues that „states
can only cooperate economically with one another when a hegemonic power holds the ring,
economically or militarily“.

2.)The theory was developed in the 1970s to explain the Pax Britannica and the Pax Americana-In his
book of 1973 The World in Depression, Kindleberger as an economic historian explained na yung
outcome ng great depression at the beginning of the 20th century with the weakness of Great Britain to
stabilize the international system and the unwillingness of the Unites States to do so, although it was
strong enough.

Eventually, Kindleberger comes to the conclusion na “for the world economy to be stabilized, there has
to be a stabilizer, or one stabilizer.”- This function has to be fulfilled by the hegemon, who is the
dominant power in the system.

Furthermore, Kindleberger states that a liberal international economy requires a hegemon committed
to liberal economic principles, at yung principles na yun ay principles of free markets, openness and
nondiscrimination. Generally, the prerequisites for the emergence and expansion of the liberal market
system within the international economy are hegemony, the liberal ideology and common interests.

Some more general statements on the central propositions of the HST were made by Robert Keohane
who argues that order in world politics is typically created by a single dominant power and that this
order is constituted by the formation of regimes and the provision of public goods. Another assumption
is that the maintenance of this order requires a continued hegemony which implies cooperation
between the participating states within the system.

2.1.1 THE HEGEMON AND ITS SYSTEM

To be defined as hegemon the actor in the international economic world has to be the dominant state in
the system, it is the leader of an alliance. The hegemon has the ability to assist stability and leadership
not only based on its economic but also on its military dominance.

[11] It also has the preponderance of material resources, has competitive advantages, technological
superiority and furthermore the political control over valuable resources.

hegemon has created a liberal international economy to promote its interests that are particularly
political as well as security interests.

Since there are also positive outcomes of the system for the other participating states and since the
hegemon has such a high prestige and status in the international political system its role is accepted and
legitimized.
The tasks of the hegemon are quite clear: It needs the ability as well as the will to establish and maintain
the norms and rules of a liberal economic order. That implies that the hegemon itself has to be
committed to liberal values

However,

the hegemonic system is characterized by instability. Because of internal and external reasons the
hegemonic power finally loses its will and ability to manage the system.[20] Generally, the hegemon has
an interest in keeping the status quo. That means it has to put more efforts on the system to stabilize it
than other members have to. The result is the extension of costs that have to be paid to maintain the
security in the system, for example military spending, stationing troops abroad, aid to allies and more.
[21] In economic terms, the hegemon

grows weary and frustrated with free riders [who can profit from the positive outcomes of the system
held by the hegemon without paying for it, the hegemon tends to pay more than its share of the costs of
maintaining the public good over the long run] and the fact that its economic partners are gaining more
from liberalized trade than it is. More efficient, dynamic, and competitive economies rise that undercut
the hegemon´s international position and the economic surplus that had financed the costs of global
hegemony.[22]

2.) Draw a concept map of Dependency theory as the product of expansion of World capitalism and
explain your answer. You can cite an example of a certain countries which involves in dependency
theory.

JALO

1. Do you think Structural Change is inevitable in an economy? Why?

In economics, structural change is a shift or change in the basic ways a market or economy
functions or operates. Structural change indicates essentially a qualitative transformation and evolution
of the economic systems, usually marked by technological progress and organizational changes. Such
change can be caused by such factors as economic development, global shifts in capital and labor,
changes in resource availability due to war or natural disaster or discovery or depletion of natural
resources, or a change in the political system.

Structural changes appear when some parts or properties are lost or added to the object,
some relations appear, disappear or change their form. In other words, SC implies changes
in the object identity.

“rapid changes in production structure are inevitable — given the differential impact of
technological innovations on the several production sectors, the differing income elasticity
of domestic demand for various consumer goods, and the changing comparative advantage
in foreign trade”
2. Based on the Four Stages of Demographic Transition, at what stage do you think the
Philippines is now? Explain.

With its population structure, the Philippines remains in the first phase of the demographic transition.
By the year 2020, the country is projected to have a population of almost 110 million Filipinos.

philippines is experiencing a slow demographic transition with high birth rates and sluggish living
standards. Filipinos must consider whether the 21st century will bring shortages of land, forests, water,
fuel, and resources and a population hungry, crowded, and in need of stability and health. Instead of a
demographic transition, the Philippines may find itself in a demographic trap.

EUGENE

1. What is the difference between UNCTAD and the two Geneva-based Organizations: WTO and
ITC?
As the home of three key international institutions on trade (UNCTAD, WTO
and ITC), Geneva is the global "Trade Hub." The three organizations collaborate closely, based
on our respective mandates and competences.

The WTO and UNCTAD have a longstanding Memorandum of Understanding dating back to
2003, which was expanded in October 2015 with the identification of no less than 11 areas of
further cooperation.

The ITC was created as a subsidiary body of UNCTAD and the WTO's predecessor, the General
Agreement on Tariffs and Trade (GATT), in 1968 and runs a number of joint activities and
projects with UNCTAD.

The organizations' activities are complementary: The WTO primarily governs global trade rules
and adjudication; the ITC's specific focus is to connect Small and Medium Enterprises to global
markets; whereas UNCTAD deals with trade policies, regulations, and institutions at national,
regional and international levels from a developmental perspective.

2. Explain what Foreign Debt Trap is. Provide two (2) examples and explain briefly

- Debt Trap means or defines a situation in which a powerful lending country or institution tries to
suffocate a borrowing country with debt to gain more control over it.

SOFIA MONIQUE

Questions for the Topics:

1. The Dollar and American Hegemony

2. The Non-system of Flexible Rates

1. Explain how the US Dollar asserts its dominance over others.

2. What are the two types of Flexible Exchange Rates?

KHRYZLER

Questions:

1. How does a gold standard work?

2. What Happened during the Era of Bretton Woods system?

JENIFER

Technology Transfer & Oil Cartel

1.) What are the challenges and importance of technology Transfer for the less developing or third
world countries?

2.) What is the largest cartel in the world and how it manipulate the price of oil and gas worldwide?

ENAR

TOPIC: THE INTERNATIONAL MONETARY SYSTEM (Laco, Report)

QUESTIONS:

1. What is the role of International Monetary System ?

2. In your own understanding, explain the Era of Specie Money, and What is the role of Money in
Politics?

JAZREEL

1. Differentiate Global North and Global South.

2. What do you think is the impact of World Economic Division?