WTO Since the End of Term Paper

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This is designed to provide a country's currency reserves with greater amounts of stability. A good example of this can be seen with the U.S. dollar tied directly to a fixed rate of gold until the early 1970s. This increased confidence and stability in the system itself. (Madura 169 -- 184)

The floating rate system is when the currencies will trade against each other in the marketplace. An example of this can be seen with the U.S. dollar moving back and forth against the Euro based on economic events. This is helping traders to evaluate the issues impacting a particular currency and the expectations in the markets. (Madura 169 -- 184)

The managed floating rate policy is when the central bank will engage in specific actions to keep the currency at certain levels. An example of this can be seen with the Japanese central bank buying dollar bills to keep the rate low. This is designed to ensure that Japanese products will remain affordable in American markets (based on the strength of the U.S. dollar in comparison with the yen). As a result, the best system for facilitating international business is a managed floating rate policy. (Madura 169 -- 184)

Suppose that you work for a medium-size manufacturing firm in the Midwest. Approximately 20% of your sales are to European customers. What threats and opportunities does your firm face as a result of an integrated European market?

The biggest threat that the firm will face is from increased amounts of competition. These firms could potentially introduce an alternate product that will undercut the company's advantages in these markets. At the same time, this is allowing the firm to sell its products to a larger demographic of consumers (without having to worry about trade barriers for the entire region). As a result, there are a series of tradeoffs that will occur during this process. (Calder 162 -- 194)

Works Cited

Ackerman, Dan. "Ineffective Steel Tariffs Now Illegal." Forbes, 2003. Web. 28 Feb. 2012

Calder, Bobby. Kellogg on Integrated Marketing. Hoboken: Wiley, 2003. Print.

Madura, Jeff. International…

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