The cross-border capital flows such as foreign direct investment, equity purchase, and bonds all made the world into a global market system. The cross-border capital declined in the year 2014. The global crisis of 2008 was one of the biggest reasons for the decline of cross-border capital throughout the world. The financial institution Company LB was affected by the global financial crisis. The global market plunged intro great crisis during this period. The global market did not recover even after 7 years of the crisis. The global market cross-border capital flows are still 66% below its peak value. To explain: The reason for the economy still recovering from the crisis and also the implication of multinational firms for buying investments to raise outside capital.

Question

Want to see the full answer?

Answer 1

Question

Chapter IC, Problem 12.4CDQ

Summary Introduction

Case summary:

The cross-border capital flows such as foreign direct investment, equity purchase, and bonds all made the world into a global market system. The cross-border capital declined in the year 2014. The global crisis of 2008 was one of the biggest reasons for the decline of cross-border capital throughout the world.

The financial institution Company LB was affected by the global financial crisis. The global market plunged intro great crisis during this period. The global market did not recover even after 7 years of the crisis. The global market cross-border capital flows are still 66% below its peak value.

To explain: The reason for the economy still recovering from the crisis and also the implication of multinational firms for buying investments to raise outside capital.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Introduction to Foreign Exchange Market: Provide an overview of the foreign exchange market and its significance in international business. Your International business is an Oil Company Located in Saudi Arabia 1a. Explain how the foreign exchange market is structured. Discuss key participants, such as banks, corporations, and central banks, and the mechanisms involved in currency exchange. 1b. Identify the currency used in your country. Explain the exchange rate and how it compares to the US dollar.

Which of the following is true about the IMF and World Bank? a. More than 190 countries participate as members of the IMF. b. They aid in dollarizing the economies of foreign nations. c. The IMF lends money to all types of countries, including advanced, emerging, and developing economies. d. The IMF provides loaner currency to countries experiencing hardship. Which of the following payment types offers payment protection to both exporters and importers, as the importer’s bank writes a guarantee of payment? a. A commercial letter of credit b. Payment in advance c. A syndicate d. A banker’s acceptance The supply chains of global businesses such as Boeing, Ford, United Airlines, and the pharmaceutical companies Merck and Pfizer are known as which type of supply chain? a. Enterprise b. Telecommunication c. Global d.…

What are the goals and function of the WorldBank, the IDA and the IFC?. What are the role of and functions of the IMF? Enumerate the purpose of the Worldbank? Which country is the IMF’s largest shareholder and consequently has the greatest influence?