Question 1

A German company is investing millions in FDI to establish a manufacturing facility in the US and the US and the State they plan to manufacture in extends them millions of dollars in incentives. Does this make sense since the German company would not be investing in FDI if they were not going to take more money out of the US than they put in? Explain.

What is the US and the State getting out of this?

Question 2

Read "Foreign Direct Investment by Cemex" on page 257 of the text and describe why you think Cemex is so successful in FDI, especially since they are basically dealing with a commodity.

How does Cemex benefit from their international presence?

Question 3

When the EU progressed from a "customs union" to a "common market" the "factors of production" were allowed to move freely among member nations. How does this effect a prosperous member country? How does this effect a member country that is relatively poor?

Question 4

Do you anticipate that NAFTA will ever progress from where it is now to a Common Market? Why or why not?

Question 5 

What are five important reasons a common currency is important in a trade bloc? Will this happen soon among the US, Canada and Mexico? Why or why not?