Management of International Business Finance Essay

Management of International Business Finance - Essay Example we can conclude that as long as the relative price of two currencies is flexible, it will then adjust to equal the ratio of their price level. Even if this type of adjustment does not take place, the ratio of price levels can give us a reference point from which we can assess if a current exchange rate is under or over evaluated in relation to its PPP level. For the OECD the simplest way to calculate PPP is to take into consideration a same product within two countries. It uses a liter of Coca-Cola to illustrate the example. In France, one liter is worth 2.3 euros where in the United States the same liter costs 2 dollars. Therefore the PPP (calculated as a ratio) is 2.3/2 which equals 1.15. The result can be interpreted as follows: for every dollar which is spent in the United States to purchase a liter of Coca-Cola, in France, it is necessary to spend 1.15 euros to receive the same quantity and quality of Coca-Cola. As the OECD points out, the PPPs are not only calculated for individual products but also for group of products. One of the most famous PPP index is the Big Mac PPP. Used as a vulgarization for a greater part of the population to understand the issues regarding PPP, it represents the exchange rate that would leave a burger in any country costing the same in America. (See Appendix 1) (The Economist â€Å"Food for Thought† May 27th, 2004.) The most important and certainly the best known research made on the failure of PPP in the long run is the â€Å"Balassa-Samuelson† effect, work of Balassa (1964) and Samuelson (1964) The effect states that if high-income countries hold a more important relative productivity advantage in the production of traded goods, they will consequently produce these goods more cheaply. Starting from the hypothesis that the law of one price – abstracting from complicating factors such as transportation costs, taxes, and tariffs, the law of one price states that the price of any particular good that

The Biography Of Blue Jeans Essay Example | Topics and Well Written Essays - 1000 words

The Biography Of Blue Jeans - Essay Example The basic motive of this project is to show that the blue jean, which had been widely used by working class individuals as an inexpensive and long-lasting piece of clothing, saw a boom in interest from all classes of society when it began appearing in Hollywood films as the clothing of choice for the era’s biggest heroes, the cowboys. â€Å"Western movies from Hollywood elevated ‘authentic’ cowboys, who were often portrayed wearing the garment, to mythic status. Just as Easterners were beginning to appreciate the tremendous comfort and durability of the new clothing style, World War II forced changes in manufacturing techniques. However, soldiers preferring to wear blue jeans while relaxing overseas helped further change the image of the blue jean from a working class, working style pant to one of relaxation and leisure, as well as of the natural abundance and enviable condition of the American lifestyle. After the war, Hollywood again helped to spread the popula rity of the blue jean by clothing their popular ‘bad boys’ such as James Dean in Rebel Without a Cause and Elvis Presley, in the popular garment, immediately associating it with the rebellious youth. Today blue jeans enjoy an unequaled status among the clothing styles of the world. Blue jeans have become the comfort clothing of the world. Recognized as an art form and enjoying numerous types of treatments from painting, stonewashed, acid dying and fancy stitching, blue jeans have proven themselves to be as versatile as they are long-lasting.