Subject individual tasks students (essays, papers, reports)

1. Basic concepts of international trade.

2. The role of intermediary firms in international trade.

3. Features of modern development of international trade of services.

4. Methods of regulating modern international trade.

5. The role of the WTO in international trade and the principles of its activities.

6. Ukraine in the global market of goods and services.

7. Potential positive and negative consequences of Ukraine's admission to the WTO.

8. Problems of Ukraine's integration into the global commodity markets.

9. Regional aspects of Ukraine's foreign trade.

10. The competitiveness of Ukrainian goods and services in world markets and ways to improve it.

 

 

Objectives

1. In Table 2.3 the production capacity of countries A and B.

Table 2.1

Country A	Country B
Production possibilities	Production capabilities of computers, thousands	Extracting oil, thousand tons	Production possibilities	Production capabilities of computers, thousands	Extracting oil, thousand tons
А			А
B			B
C			C
D			D
E			E
F			F

 

Before the establishment of trade relations between countries A and B the optimal structure of production possibilities for country A had the option B, and for country B - option D. Answer the following questions:

• Are there any preconditions for mutual trade of A and B? On manufacturing of which product should each nation specialize in case of setting up trade relations between them?

• What will be the total increase in production of computers and oil gained as a result of absolute specialization of each country?

Suppose that the real terms of trade is 1 PC = 1.5 tons of oil and that 4 thousand computers are exchanged for 6 thousand tons of oil. What will the benefit from full specialization for each country on each product?

2. The economy N has a number of manpower 120 thousand people and can produce two kinds of products: computers and cars. Shares of labour costs in manufacturing computers is 3, and for cars - 2.

• Construct a graph of productive capacity of the country (production possibility curve;

• What would be the relative price of computers in the absence of foreign trade? Why?

3. The situation in domestic economy is described by the terms of the previous problem. Suppose that foreign economy has labour resource in the number of 80 thousand people and its labour costs to manufacture computers and cars are 5 and 1 respectively.

• build a production possibility curve of foreign economy.

4. Several countries, exporting goods, organized a cartel to raise the price of this product on the world market. Countries control 30% of world market of this commodity. Elasticity of world demand for goods - 0.8, and the elasticity of supply of goods by the countries that are not members of the cartel - 0.5. Calculate an increase in world prices for the commodity, optimal for the cartel.

5. Suppose that Germany imports to the U.S. a commodity X. If the price of the product in the U.S. is $5 per unit, how much it will cost in Germany at the rate $1 = 0.85 euro. If the U.S. will support the increase of the exchange rate on dollar, how will this affect the trade of the two countries?

 

Seminar 3

Plan

1. Sense, causes and main forms of international capital movement.

2. International investments and their systematization.

3. Transnational corporations and their role in the modern development of the IER.

 

Revision

1. What is the nature and causes of international capital movement?

2. The difference between entrepreneurial and loan capital in terms of the impact on the economy of the exporting country.

3. What are the patterns and characteristics of capital export in the current context of globalization?

4. What are the main benefits of the import and export of capital into the national economy?

5. What is index of transnationalization (IT) and what is the method of its calculation?

6. What is the fundamental difference between direct and portfolio investments?

7. What quantitative criteria are used in world economic practice in characterizing the investments as direct?

8. Describe the basic theory of FDI and transnational corporations.

9. Describe the theories of portfolio investing.

Issues to discuss

1. Explain the attractiveness of foreign direct investment for economies in transition. What are the possible negative effects of unregulated attracting of FDI for such economies?

2. Analyze the interaction of international investment market with ressource, money and credit markets.

3. What is specific for regulation of foreign investment in different countries (developed, developing countries, countries with economies in transition)?

4. Expand the impact of globalization on international investment trends.

5. What factors influence the formation of a favourable investment climate in the country? Illustrate your reply with specific examples.

6. What are the causes of more prevalent volumes of international investments into developed countries?

 

Subjects of individual tasks for students (essays, papers, reports)

1. The role of foreign investment in the transformation process for economies in transition.

2. Economic activity of foreign companies in the countries with economies in transition.

3. Regional features of FDI in the conditions of globalization.

4. Features of the interaction between TNCs and national economies-recipients of investment capital.

5. Factors of increasing the efficiency of international investment activity in Ukraine.

6. Mergers and acquisitions in international business.

7. Forms and methods of regulating international investment at national and international levels.

8. The main features of the dominant investment strategy and Ukraine.

9. Perspectives of venture capital in Ukraine.

10. The role of free economic zones and joint ventures in Ukraine's integration into the world economy.

 

Objectives

1. Which of the following forms of investments are direct and which are portfolio:

- Russian company "Lukoil" bought the shares of Ukrainian oil refineries in the amount of $ 20 million. The total value of shares is 100 million.;

- U.S. Bank "City Bank" bought the building in Kiev and opened its representative office in Ukraine;

- German automotive concern "Skoda" increased its stake in the share capital deployed in Ukrainian-German joint venture, which is responsible for selling cars on the Ukrainian market from 50 to 80%;

- The American company "McDonald's" has opened another fast-food restaurant in Kyiv;

- U.S. investment fund placed in Ukraine $ 30 million in foreign government bonds.

2. An American company plans to open a branch in Brazil. On the one hand, Brazilian laws regarding import regulations, forbid it to sell its products in the Brazilian market. On the other hand, the U.S. company does not want to sell its patent rights to Brazilian firms, being afraid that this will derive it from its technological advantages in American market in the end. What is your opinion on solving this dilemma?

 

Seminar 4

Plan

1. Sense of international credit as a form of movement of loan capital, its function in today's global economy.

2. Forms of international loans and factors of international credit relations development.

3. The world financial market and its structure.

4. European market of credit resources and features of its functioning.

5. The problem of external debt and its solving.

 

Revision

1. Define the term "international credit". What are its main features and functions in the global economy?

2. Describe the major forms of international credit. How is international credit associated with the financing of foreign trade?

3. Define the international loan capital market. Describe its key segments in terms of functional, institutional, geographical and monetary structures.

4. What are the factors, conditions and peculiarities of functioning of the European market of credit resources?

5. What is specific for loan and deposit operations in the European market of credit resources? What subjects of the IER are the main participants of the European market of credit resources?

6. What is the role of the international monetary and financial institutions in the process of international crediting?

7. What is external debt? What quantitative and qualitative indicators can assess the risk of external debt for an economy?

8. What is the problem of external debt? What are the possible solutions for different countries?

9. What is the external debt crisis at the level of national economies? What are the mechanisms for restructuring of foreign debt?

10. Describe the activity of Paris and London Clubs. What is the role of non-governmental institutions in solving the external debt problems of countries?

Issues to discuss

1. What is the impact on the economy of developing countries and new independent states of external financing in the form of loans?

2. Today the U.S. is one of the largest capital importing countries in the world economy. What capital inflows, in your opinion, form the external debt of the country?

3. A considerable part of loans made to developing countries in 1970 was accounted for by state-owned companies. Later, some countries began the privatization process, which involved the sale of state enterprises to private individuals. Provided the privatization process was launched earlier what volume of foreign investments could be attracted by these countries?

4. If the U.S. bank accepts a deposit from one of its foreign subsidiaries, then this deposit is subject to the reserve requirements of the Federal Reserve System. Similarly, reserve requirements apply to any loan provided to a resident of the U.S. by foreign subsidiaries of American bank or any assets purchased at the main branch of the bank. Due to what circumstances, in your opinion, do these procedures exist?

5. Prove that competitive advantage of European banks increases compared to U.S. banks with increasing interest rates in the United States.

6. After the debt crisis in developing countries government regulation of the banking system of the U.S. imposed strict control over credit policy of U.S. banks and their foreign branches. During the 1980s the share of U.S. banks in the London financial centre operations has been continuously decreasing. Try to establish a connection between the two events.