If Asset Owners in Japan and the United States Consider

question 348

Multiple Choice

If asset owners in Japan and the United States consider Japanese and U.S. assets as good substitutes for each other and if the U.S. interest rate is 5% and the Japanese interest rate is 2%, then all of the following will occur EXCEPT that:

• A)financial inflows will reduce the U.S. interest rate.
• B)financial outflows will increase the Japanese interest rate.
• C)the interest rate gap between the United States and Japan will diminish.
• D)loanable funds will be exported from the United States to Japan.

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Definitions:

International Context

A perspective that considers the influence of global forces, cultures, market dynamics, and legal systems on businesses, policies, and strategies.

Third-Country Nationals

Employees who are working in a country other than their home country but are not citizens of the country where the employer's organization is located.

Parent-Country Nationals

Individuals who are citizens of the country where a multinational company has its headquarters.

Cultural Norms

The shared expectations and rules that guide behavior of people within social groups, including organizations, influencing how individuals act and interact.