Analysis Of Three Fundamental Assumptions Are Made

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Throughout this policy paper, three fundamental assumptions are made: 1. The Murdell-Flemming Model is a fundamentally sound method of analysis. 2. A global trend toward liberalization of free trade is both strictly current and strictly relevant to Chinese economic growth. 3. The power dynamic between host country, home country, and Multinational Corporation is a driving factor in cross-regional mergers and acquisitions and thereby domestic economic growth as measured by nominal gross domestic product. The Murdell-Flemming Trilemma or “Unholy Trinity” states that a government can only generate policy that satisfies two of three general desires; these desires are exchange rate stability, capital mobility, and domestic monetary autonomy (Cohen, 2010). Concerning the China, the general international monetary choices should be capital mobility and domestic monetary autonomy. In an era where multinational corporations are increasingly looking to cross-regional mergers and acquisitions to create value, it is more important than ever for China to retain capital mobility and domestic monetary autonomy (Cross-Regional, 2015). Through an examination of multinational corporations and domestic monetary policy choices, the need for capital mobility and domestic monetary autonomy become clear. This need is proven through the effects these policy choices have on domestic monetary value and the subsequent consequences these effects have on cross-regional mergers and acquisitions. The
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