1. Discuss the similarities and differences between foreign direct investment and foreign portfolio investment? Why are these flows important for developing economies? What are th

1. Discuss the similarities and differences between foreign direct investment and foreign portfolio investment? Why are these flows important for developing economies? What are the risks associated with sudden stops or reversals in these types of flows?
2. Consider the exchange rate for the US Dollar and the Thai Baht, which is 31.5 THB/1 USD. Assuming that the exchange rate is in equilibrium, and the current interest rate in the US economy is 0.25% and in Thailand it is 1.4%. If the interest rate in the US increases to 1%, what effect will this have on the value of the Thai Baht? Explain the impact on the supply of Baht and the demand for Baht.
3. What is NAFTA? When was it implemented, and what impact did it have on production in the United States and Mexico? How was it recently revised, and what issues were “solved” with the revision of NAFTA in the new USMCA agreement?
4. What are the three major areas of ethical concern for multinational corporations? Discuss the conflict that MNC’s face under each one.