1. Why do U.S. corporations build manufacturing plants abroad when they could build them at home?
2. Should firms require higher rates of return on foreign projects than on identical projects located at home? Explain.
3. What is a Eurodollar? If a French citizen deposits $10,000 in Chase Manhattan Bank in New York, have Eurodollars been created? What if the deposit is made in Barclay's Bank in London? Chase Manhattan's Paris branch? Does the existence of the Eurodollar market make the Federal Reserve's job of controlling U.S. interest rates easier or more difficult? Explain.