Question 1 of 20 :
Select the best answer for the question.
1. Which one of the following statements about foreign trade is correct?
O A. In recent years, the United States has fallen to third behind Japan and Germany in the list of
leading export nations (absolute volume basis).
O B. In recent years, the United States has had a small goods trade surplus with Japan.
O C. In recent years, the United States has exported more services abroad than it has imported.
nited States has had a large goods trade surplus with the rest of the world.
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The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?