Comparison between the effects of globalization on the USA and Saudi Essay - 2

Comparison between the effects of globalization on the USA and Saudi Arabia economics - Essay Example Countries, which previously depended on their own resources for the production of goods and services, are now able to choose from one further option. They can purchase cheaper materials needed for production. Hiring cheaper or more highly skilled labor that is available in a different country is now a feasible option. Even simply buying finished products from different countries is possible due to globalization. While on the surface, this liberalization seems to help only the country that is able to avail these goods and services, this is not the case. It is true that the country importing the goods is able to take advantage of the lower prices of raw material, services, and products in the other countries. This country is most often a developed country. On the other hand, the country it imports these cheaper goods and services from are usually developing. This liberalization helps the exporting country as well. This is because these countries have excess of these goods and services. For example, many developing countries will have an excess of unskilled labors, and not enough employment opportunities for them. This would not only result in unemployment, but also an economy in recession. To be able to use this excess labor to fulfill the need for cheap labor in other countries is a considerable benefit to the developing country (Stallings, 2001). The liberalization that accompanies globalization can also result in several problems for the country, which need more immediate attention. For instance, the high growth that liberalization in trade will cause will result in that country’s carbon dioxide emission increasing inevitably. The emission of carbon dioxide (CO2) is an example of how this high growth in the world economy would be detrimental to the natural environment. Issues like global warming and pollution would only be aggravated due to this effect of globalization, and seems to decrease the importance of stressing on a high growth strategy. Another issue

Corporate Financing Report Essay Example | Topics and Well Written Essays - 750 words

Corporate Financing Report - Essay Example The company's chief also stated that this is done to increase the value of business for shareholders and to utilize the cash which is lying idle. The article is about financial management, because according to the fundamental principle, any cash lying idle is decreasing its future value. Therefore, all cash must be earning some returns too keep up with the future value. On the other hand if you look at the article critically, there are some weak arguments in it. When the firm says that it want to diversify to spread the risk, it should be aware that recession hits all the business and they may not be able to cover the losses. Similarly, firm will also have to make deep analysis about the future value of their investment. They cannot just invest in anything but they should make sure that they investing at the right place where the firm is not using future value of their cash, in other words, returns on this investment or profits should be greater than inflation rate in the country. Only this way future value of their money will remain stable and writer should have discussed this point in his article. If you have been able to crack a continued trend in the market about inflation rate and interest rate, you should adjust your capital spending on the basis of these. You should always go for those assets which are going to give you more return than inflation rate. ... you 12% returns whereas inflation rate in your country is 13%, then you should not buy this assets because you will be 1% worse off or your money value will be decreasing over time. Similarly, you should go for those assets which are giving you returns of more than the inflation rate and in this way purchasing power of money will not be deteriorating. Similarly, you should borrow money to invest in capital expenditure, only if it is deemed that you'll get more returns than the interest rate. If you buy an asset giving you 5% return whereas you have borrowed money at the rate of 8% then you will not be benefiting from that purchase but instead you will be losing money. So, identifying the market trend, it is imperative that all capital spending should be linked with inflation and interest rate. Such expenditures should only take play if the returns of this spending are greater than the forecasted inflation and interest rate. References James Pethokoukis, Reuters, Written on 10 June