Question 1 (a) Balance of payments is a summary transaction between domestic and foreign residents for a specific country over a specified period of time. (i) Explain ANY TWO (2) causes of current account deficits in a country. (4 marks)

(ii) Trade deficits often raise the opposition of protectionists who think that imports areand Discuss the statement above with ANY FOUR (4) reasons to exercise protectionist policy by using less-developed country as an example. (20 marks)

(b) In multinational financial management, outsourcing refers to the process of subcontracting a part of business production to a third party in another country to provide supplies or services that were previously produced internally. Discuss ANY FIVE (5) challenges that the managers of Nestle in Switzerland often encounter when making decisions on outsourcing to a third party in other countries such as Malaysia. (10 marks)

(c) Discuss ANY TWO (2) availability of the international trade finance to the MNCs. (6 marks)

[Total: 40 marks]