Running Your Own Mnc
CHAPTER 2: ASSESSMENT OF COUNTRY FACTORS
Factors Affecting Balance of Trade between United States and Maldives
The following factors will affect the balance of trade between the United States and Maldives (Boundless, 2016): 1. Prices of domestic goods: This is the price of the jewellery manufactured in Maldives in comparison with jewellery manufactured in USA. 2. Barriers to trade: These are restrictions to trade between USA and Maldives. 3. The cost of production in the USA versus the cost in Maldives. 4. Currency Exchange Rate: This is the foreign exchange rate between USD and Maldivian Rufiyaa.
The factors outlined above will affect the demand for jewellery in Maldives as follows: 1. Prices of domestic goods:
Due to high costs of production, Maldivian handicrafts are more expensive than imported jewellery (Ahmed Zakariyya, 2007). Demand for imported jewellery is thus higher than that of locally made jewellery. 2. Barriers to Trade:
The countries have fostered good trade relations. The USA and Maldives signed a Trade and Investments Framework Agreement in October, 2009 with the aim of