Answer All Questions and Show your workings..

a) Analyse four components of the financial account as used in the balance of payments of a country. b) Summarise five assumptions of the theory of comparative advantage as postulated by David Ricardo (1817). c) In an effort to integrate the world trade, a great milestone has been achieved towards globalization of the world economy. World's businesses are turning to foreign sales and cross-border partnerships as paths towards expansion and consolidation. In relation to the above statement, discuss four events and trends that could have contributed to the reduced restrictions and increased international trade. d) Explain three sources of short term borrowing that could be used by a multinational corporation to finance its operations.a ) The value of your country's currency has been experiencing a drastic downward decrease in value relative to other major world currencies. In relation to the above statement, discuss four strategies that could be adopted by the central bank of your country to stabilize the local currency. b) Evaluate four benefits that could accrue to a multinational corporation (MNC) that uses bilateral netting. c) Assume that the following exchange rate information is available between the United States of America (USA) and Britain: USA Britain Nominal interest rate 4% 6% Expected inflation rate 2% 5% Spot rate $1.13 One year forward rate $1.10 Required: i. The forward rate of the British pound (GBP) assuming interest rate parity exists between the USA and Britain. li. The expected spot rate of the GBP in one year assuming the purchasing power parity (PPP) holds between the USA and Britain.ili. The expected spot rate of the GBP in one year assuming the international fisher effect (IFE) holds between the USA and Britain. iv. Describe two methods that could be used to determine whether the purchasing power parity (PPP) exists among countries