Developed vs. Developing Country You have been recently hired by a multinational
ID: 353158 • Letter: D
Question
Developed vs. Developing Country You have been recently hired by a multinational firm that manufactures airplanes parts. They are interested in investing in a new factory. However, the CEO is unsure of where they should invest. The CEO would like to either invest in a developed or a developing country and your input is valuable to his decision. Your focus will be on providing specific information on both a developed and developing country, providing that both countries have data for the last 20 years. You will need to provide support, through your analysis, for which country you think will be best for this factory to invest in. Do not pick a country that does not have data that is easily accessible. Be sure to include the following items in your paper: . Select a developed and developing country . Explain why you selected those particular countries. . Analyze four economic indicators that are important for the two countries you selected. . Describe these indicators and why you selected them. . Compare and contrast their fiscal and monetary policies during a recent economic growth and recessionary periods. How have their policies lead to economic stability? Evaluate two recent trade policies in the countries that you have selected. Explain the impact of these policies on your investment. Choosing one of the two countries, analyze their decision to reduce trade restrictions, such as how import tariffs affect the ability to borrow in the world capital market. . Examine the currency of each currency and explain how that will influence your investment . Provide a conclusion, supported by academic research, for which country you would recommend to the CEOExplanation / Answer
1. The chosen nations are US as developed nation and India as developing nation
2. for this discussion, I have taken the two largest nations of India and US. US is the developed nation in all aspect where as India is developing nation in many aspects. US is the richest capitalistic nation among the world and India is the Second largest populated nation among the world. US is the world power in many aspects, where as India is the one of the nations which is having largest conumer and pupulation aspects.
3. the 4 economic indicators are- GDP rate, Employment rates, Interest rates, Per capita Income, Inflation rates etc
GDP rate of US is 2.6% for 2016 and India is 6.5% for the same year. Employement rate is increasing in US when compares to previous years due the strategeis and policies taken by US governmet, where as the rate of employment in India is still not upto the mark.
Interest rates in US are at 0.5 to 1% during the period where as is India it is about 7 to 9%. The rate of inflation in India is about 5 -7% during the period, in US it is about 2% during the period.
Per capita income is higher in US about $32,000 in the year 2017, in India the per capita income is about $1400- $1500.
4. These are the core components as economic indicators to any nation. These are the factors which show more impact on growth and development of any nation. A small variation in these numbers show big impact on the nation in both positive and gegative side also. Nations and the governments works to improve the indicators which help them to list higher growth. With the reason only I have taken the said components as economic indicators.
5. The Fiscal policy, includes tax structure (sources of income to the government) and government spending is much higher in US comparatively India. Because, the quantum of tax payers are higher in US than India, the same amount is going to be utilized for government purposes. In India, the tax payers are little in number and the tax collections and less compares to USA.
The Monitory policy structure much liberal in US and it is rigid in India.
Both India and US are having liberal trade policies with other nations, recently US is focused import and export taxes more specifically, with the reason only the taxes on Steel and Alluminium are come into the picture between US and rest of the world.
US currency is namely as Global currency is having higher value in market, where as Indian rupee is having lesser exchange value than any other currencies.
US is the developed nation and growth rate and opportunities are limited when compares to India. As one of the high populated nation, potential growth aspects is higher in India than US. Hence, if get a chance, I prefers to work for India which includes some challanges and opportunities.
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