Question #1: Dollar Swoons Open Doors
The dollar swoon, as the specialists suggest, is a situation which will favor America and also in some way, will affect the financial standing negatively. With the dollar being of a lower value, much of its exports will be cheaper and affordable to the rest of the countries. This will not only heighten their exports but also may contribute to an overall rise in the countries revenue. For instance, records and existent financial statistics show the value drop that the dollar has been experiencing has had a positive effect on Consol Energy, a Pittsburg based coal mine. This has enabled it to outdo it completion which is South Africa and Australia, some of the largest coal producers. China has been one of the countries that have greatly imported coal from the company thus resulting in an increase in the company’s profits.
The cause of the dollar being weak in the global market is as a result of the increase in imports to an extent that they are way more than the exports. This resulted in a deficiency in the available money. This leaves the federal bank to produce much more currency to meet the demand for the dollar. The drop of the dollar led to the European people to have an increased interest in the products. The lowering of the value could lead to undesirable results. These would include increase in oil prices by oil supplier to compensate for the devalued dollar. This devaluation is also expected to favor global companies with multiple branches all over the world to a small extent. This is because it will increase the exports for the branch in America. It will also favor the smaller companies greater in the future listing a potential of activities that these companies might receive once the dollar’s value rises. If the company happens to be in the export business, more sales will be realized enabling it to grow in size with time.
Question #2: “Big Business: Why the Sudden Rise In the Urge to Merge and Form Oligopolies?”
In his article, Greg Ip describes certain business related situations that call for mergers and their endless merits. He believes that mergers and the consolidation of the companies into oligopolies has been very beneficial to the companies and have decreased any threats posed by any obstacles. Additionally, he claims that these benefits are slowly increasing especially for technological products related companies. Oligopolies and mergers have been seen to expand and realize unbelievable profits though all this is at the customers’ expense. It is however notable that as Ip suggests, Oligopoly mergers are assisting in the reduction of unhealthy competition in the market. These facts, in some manner affects the price of the products since they are enjoying some form of monopoly thus determine the price on their own.
Though oligopoly mergers are useful and essential to both the government and the involved companies, the trend has been met with several obstacles. First of all, the recession and the sagging nature of the stock led to a decline in mergers. However, in 2001, more mergers were witnessed than they had ever been formed in the preceding two decades. This will however change with the economical revival as Ip, puts it. But generally, oligopoly is the new trend in corporation and its merits are endless. This is not only in the US but also elsewhere too.
