--%>
Assignment Help - homework help

Problem related to direct foreign investment

China is a huge manufacturer of technology of telephone devices. It has lately become a member of W.T.O. that means it can sell its products in other member countries such as India. Assume that it does export a big number of telephone instruments to India:

(i) How will it influence the price and quantity sold of telephone devices in India?

(ii) Assume that the demand for telephone devices is relatively elastic. How will it influence India’s total expenses on telephone devices?

E

Expert

Verified

Answer:

(i) As an outcome of big export of telephone devices by Chine to India, the market supply of telephone instruments rises. It decreases the price of telephone devices while the quantity sold will rise.

(ii) When the demand for telephone devices is relatively elastic, reduction in price must raise total expenses on telephone devices in India.

   Related Questions in International Economics

  • Q : Balance of trade Which transactions

    Which transactions find out the balance of trade? When the balance of trade is in surplus?

    		•
  • Q : Key challenges to india's economic

    Identify the key challenges to india's economic development. To what extent the second generation reforms will tackle the current challenges of india's development

    		•
  • Q : Homework help for manufacturer &

    Question 1 Household Tools Co. is a manufacturer of microwave ovens. The manufacturer wants to increase the shelf life of their products. Past records indicate that the average shelf life of their microwave ovens is 240 days. After a new line of microwave ovens has been d

    		•
  • Q : How Balance of payments always balances

    Balance of payments (BOP) always balances. Describe it. Answer: Balance of payments is for all time balanced. The negative balance on current account is equated wit

    		•
  • Q : How is the exchange rate influenced by

    ‘The country has a floating exchange rate and its inflation rate is much higher than its trading partners. Why we would suppose the country’s exchange rate to deflate?’

    		•
  • Q : Tourism services to tourist-Balance of

    In which account of balance of payment tourism services to tourist are involved? Answer: Tourism services to tourist are comprised in current account of Balance of

    		•
  • Q : Kind of exchange rate State which kind

    State which kind of exchange rate has no official intervention in foreign exchange market? How it is recognized?

    		•
  • Q : Define fixed exchange rate Fixed

    Fixed exchange rate: It is the rate of exchange which is fixed by the Government in an economy.

    		•
  • Q : Manegment . In 2007 and 2008 Boeing ran

    . In 2007 and 2008 Boeing ran into several publicized issues with regard to its management of a globally dispersed supply chain. What are the causes of these problems? What can a company such as Boeing do to make sure such problems do not occur in the future?

    		•
  • Q : Why Supply of foreign exchange is made

    Supply of foreign exchange: (A) By exports of services and goods(B) Direct foreign investment in residence country(C) For approximate purchases by non-residents in the home country(D) Remittances

    		•