Finance is the way to go

Rick Politician 873454/21/2007 I BUS 300 Chapter 7 Homework a. Before the 1980s, the French government held strong convictions in the benefits of a planed economy and nationalizing private business. Multinational companies' efforts to create FDI in France were repealed for fear that these companies would be uncontrollable variables that inhibited the planned economy. Furthermore, the French people feared multinationals would put their smaller businesses out of business. The French government shifted the explicit anti-FDI policy in the 1980s by reducing the barriers against FDI. The main dtree for this occurred when the government realized that FDI created jobs, increased local technology and aided in equaling out the balance of payments. This new openness to FDI was furthered when the free market economist Jacques Chirac became president of France. b. Benefits for France Benefits for Japan $656.8million into France to build the new car plant Increased efficiency for Toyota. This means more money coming into Toyota, which translates into a stronger Japanese economy. %60 of components made in Europe. New business for component manufacturers $2,000-4,000 new jobs Equalizing balance of trade Costs for France Costs for Japan Less income from tariffs on Toyota vehicles. No import duties. Shipping industry no longer needed as much for shipping Toyota vehicles Loss of 2,000-4,000 potential jobs Loss of business for component manufacturers