ACADEMIC YEAR: 2014/15
THE BUSINESS SCHOOL
Department of Accounting, Finance and Economics
THE GLOBAL ECONOMY
DURATION OF TEST: Monday 20 April (00.05) to Monday 27 April (23.30)
Questions posted Monday 20 April 2015 (00.05)
Deadline for electronic submission through StudyNet: Monday 27 April 2015 (23.30)
INSTRUCTIONS TO CANDIDATES:
- Answer ANY TWO QUESTIONS
- Word limit 1200 words for each question (references are excluded from the word count)
- Each question carries equal marks
- Answers should be illustrated wherever possible by examples
- Candidates are permitted to retain this question paper
Answers may be subject to electronic checking for plagiarism. They must be written in your own words (except for quotations), be properly referenced and conform to an essay structure. That is, they must have an introduction stating the scope of the answer, paragraphs that focus on specific building blocks of the answer, and a conclusion that is based on the content of the answer and directly relates back to the subject of the answer. It must be written as a continuous discussion with no sub-headings or bullet points. The discussion must be supported by examples and references cited in the text. A list of references must be provided at the end, which must cite predominantly book/journal articles and authoritative sources.
As is normal practice in the Business School, anyone found to have plagiarised material is likely to fail the module and may be subject to other disciplinary procedures.
This paper consists of FOUR questions on 1 page
1: Crude oil prices fell from $110/barrel in May 2014 to below $50/barrel in January 2015. Using appropriate economic theory, explain this fall and its implications for the global economy.
2: Assess the extent to which recent movements in the exchange rate against the US dollar of the Russian rouble, the euro, the Swiss franc and the Japanese yen, can be explained by variations in interest rates.
3: Effective tax rates around the world are generally far below headline rates with many well-known multinationals paying little tax. Explain how: i) these companies are able to reduce their tax liabilities; ii) where tax issues fit within the theory of multinationals; and iii) assess the challenges facing tax authorities in their quest to increase corporate tax revenues and reduce aggressive tax avoidance.
4: An advisor to former US president Bill Clinton is reported to have argued that in determining election outcomes “it’s the economy, stupid”. If this is the case, then where is democracy in the Eurozone where a wide range of economic policies are determined in Brussels?