PART 2
THE ENVIRONMENT OF INTERNATIONAL BUSINESS
CHAPTER 9
THE INTERNATIONAL MONETARY AND FINANCIAL ENVIRONMENT
Instructor’s Manual by Marta Szabo White, Ph.D.
I. LECTURE STARTER/LAUNCHER
1. Which currency is the second largest reserve currency in the world as well as the
second most traded currency in the world?
■ Answer: The euro
◘ Second largest reserve currency in the world (a status it inherited from the
German mark)
◘ Second most traded currency in the world after the U.S. dollar
2. Which country has experienced massive capital inflows, which has led it to become
the world’s largest holder of “foreign exchange reserves” (money that nations receive
from their international transactions, such as exporting)?
■ Answer: China
3. Which country has been buying the majority of the issues of United States Treasury
securities in recent years (totaling $1240.8 billion in July, 2015) and making it the
world’s largest investor in U.S. government debt?
http://www.ustreas.gov/tic/mfh.txt
Accessed October 9, 2015
■ Answer: China
4. Which two countries are responsible for nearly half the world’s economic growth in
recent years, representing the world’s most important bilateral economic and trading
relationship?
■ Answer: China and the United States. The United States is inextricably tied to
China because the U.S. relies on China to buy its government debt and to
produce the products that U.S. consumers buy in massive quantities. China is
inextricably tied to the United States for its massive investments in the Asian
country and because the United States is the most important market for China’s
product exports.
5. International business transactions take place within the global monetary and
financial systems. When people think of international trade, they invariably think of trade
in products and services. However, the markets for foreign exchange and capital are
so much larger. This chapter explores the nature, organization, and functions of the
foreign exchange market.
[1] TED TALK
How we can predict the next financial crisis
Didier Sornette
Filmed June 2013
The 2007-2008 financial crisis, you might think, was an unpredictable one-time crash.
But Didier Sornette and his Financial Crisis Observatory have plotted a set of early
warning signs for unstable, growing systems, tracking the moment when any bubble is
about to pop. (And he’s seeing it happen again, right now.)
https://www.ted.com/talks/didier_sornette_how_we_can_predict_the_next_financial_cris
is?language=en#t-22497
16.57 Minutes
[2] TED TALK
Who controls the world?
James B. Glattfelder
Filmed October 2012
James Glattfelder studies complexity: how an interconnected system — say, a swarm of
birds — is more than the sum of its parts. And complexity theory, it turns out, can reveal
a lot about how the economy works. Glattfelder shares a groundbreaking study of how
control flows through the global economy, and how concentration of power in the hands
of a shockingly small number leaves us all vulnerable.
https://www.ted.com/talks/james_b_glattfelder_who_controls_the_world?language=en
14.03 Minutes
[3] TED TALK
How to expose the corrupt
Peter Eigen
Filmed November 2009
Some of the world’s most baffling social problems, says Peter Eigen, can be traced to
systematic, pervasive government corruption, hand-in-glove with global companies. In
his talk, Eigen describes the thrilling counter-attack led by his organization,
Transparency International.
https://www.ted.com/talks/peter_eigen_how_to_expose_the_corrupt?language=en
16.05 Minutes
[4] TED TALK
A monkey economy as irrational as ours
Laurie Santos
Filmed July 2010
Laurie Santos looks for the roots of human irrationality by watching the way our primate
relatives make decisions. A clever series of experiments in “monkeynomics” shows that
some of the silly choices we make, monkeys make too.
http://www.ted.com/talks/laurie_santos?language=en
19.38 Minutes
[5] YOUTUBE
Episode 33: Exchange Rates
How do currency values rise and fall? Why would a country want to manipulate
the value of its own currency?
Dr. Mary J. McGlasson
mjmfoodie
Uploaded on Apr 13, 2010
https://www.youtube.com/watch?v=xwtgByffoUw
6.23 Minutes
[6] YOUTUBE
Imports, Exports & Exchange Rates
Milton Friedman
LibertyPen
Published on Aug 13, 2012
Professor Friedman explains the principles that govern imports, exports and exchange
rates.
https://www.youtube.com/watch?v=c9STBcacDIM
14.00 Minutes
[6] YOUTUBE
The foreign exchange market
Fabienne Deville
Voice by David Homburg
Uploaded on Dec 9, 2011
https://www.youtube.com/watch?v=-qvrRRTBYAk
2.51 Minutes
[7] YOUTUBE
Bretton Woods Explained
MrStingls
Published on Apr 10, 2015
https://www.youtube.com/watch?v=Nf5Bkkg_Y7U
2.01 Minutes
[8] YOUTUBE
140 Years Of Monetary History In Just 10 Minutes
Financial Education Is Asset
Published on Aug 28, 2013
– Are we overdue for a new monetary system?
– Is war good for an economy?
– Why did Nixon sever the link between all currencies and gold?
https://www.youtube.com/watch?v=pT5Wdrtsq1I
9.28 Minutes
[9] YOUTUBE
1944 Bretton Woods International Monetary Conference
danieljbmitchell
Uploaded on Aug 16, 2007
This newsreel excerpt briefly describes the international monetary conference of 1944
(before WW2 ended), held at the Mount Washington Hotel in Bretton Woods, New
Hampshire. The conference founded the International Monetary Fund and the World
Bank. The fixed exchange rate system created at the conference came under
increasing strain in the 1960s and was ended unilaterally by President Nixon in 1971.
https://www.youtube.com/watch?v=GVytOtfPZe8
1.34 Minutes