Week 2

1.    Rouble

a.    Russian perspective foreign currency terms:                  1                          × 100 = 265. 14% USD 109.6327

appreciated by 265.14%

b.    Russian perspective home currency terms:  × 100 = 265. 14% USD appreciated by 265.14%

c.    US perspective foreign currency terms:  × 100 = −72.61% Rouble declined by 72.61%

(−)

declined by 72.61%

2.    Ukraine is able to produce wheat more efficiently than other countries and therefore is a major exporter of wheat to Europe.

3.    Even though Australia has a comparative advantage is the production of rice it is unable to     export rice to Japan because the Japanese government interferes in the global rice market by placing quotes and tariffs on the importation of rice

4.   Tesla

a.    Market seekers – Tesla is seeking a new market.  Potentially, Tesla might be seeking       political safety as Australia is a country that would not interfere with private enterprise. AND potentially, Tesla might be seeking knowledge workers and maybe raw materials.

b.   The six challenges Tesla would face are:

•   Twin Agency

•    Foreign exchange

•    Political

•    Corporate governance

•    Culture, history, institutions

5.   Atlassian will face all the challenges of international expansion when it launches into Europe:

•    Culture, history, institutions

•    Corporate governance

•    Foreign exchange

•    Political

•    Domestic financial theories

•    Financial instruments

•   Twin agency

Week 3

1.    Ukraine:

a.    The World Bank was developed as part of the Bretton Woods agreement to rebuild post- war Europe and most likely will be engaged to rebuild post-war Ukraine

b.   The other gubernational agency that was developed as part of Bretton Woods was the International Monetary Fund.  The IMF was created to assist countries to stabilise their currency

c.    These agencies were created as part of the Bretton Woods agreement

2.    Currency regimes:

a.    Being pegged against the British Pound meant the Australian dollar had a fixed exchange rate, that was able to move within a range, against the British Pound

b.    Being pegged against the US dollar meant the Australian dollar had a fixed exchange rate, that was able to move within a range, against the US dollar

c.    Being pegged against a basket of currencies means the Australian dollar had a fixed    exchange rate against an INDEX of a basket of currencies, the basket defined by the    Reserve Bank of Australia based upon Australia’s major trading partners, and that the exchange rate against this index was able to move within a range.

3.   The impossible trinity are three characteristics that are impossible to achieve simultaneously.   One, or two of these characteristics may be achieved, but all three are impossible to achieve at once.  These characteristics are:

a.    exchange rate stability

b.   full financial integration

c.    monetary independence

4.   The Euro is a global reserve currency which means the Euro is held as foreign exchange reserves by central banks.  The requirement to achieve global reserve currency status is that there must  be sufficient Euro in the global monetary system for it to be held by central banks.  Therefore,    the Eurozone must run current account deficits.

Week 4

1.    Being a major exporter of wheat and minerals means Ukraine would be expected to run a            current account surplus as money comes into the country to pay for these goods.  Balancing this cashflow would be an outflow in the financial and capital accounts.

2.    Shutting down the SWIFT network means that Russia’s financial institutions are unable to     transfer payments to the rest of the world, and therefore Russia will be unable to export or  import goods and services.  Accordingly, there will be no impact on the balance of payments