1) Watch the above video and study the three Exchange Rate Powerpoint presentations;
2) Read the article in the textbook: “Is a Strong Currency Always in a Nation’s Interest?”, page 692-693 (Week 4.pdf), the article is the same in both the 7th and the 8th editions, only the art work is different.;
3) Go to the X-Rates Web site (http://x-rates.com) and find the current:
a) exchange rate for the US Dollar (USD) and any other country’s currency that you wish to study – you can select the same country that you are using for your research project, (unless it is the Peoples’ Republic of China). Do NOT select the Chinese Yuan as your other currency since it is not a freely floating currency;
b) then from the icons below the currency selection boxes, select Graphs and then select 1 year;
c) based on the 12 months of data, which currency is appreciating (gaining value) and which is depreciating (losing value)? Remember it can do both in a year.
d) Now go to the CIA World Factbook and find out what goods and products the country you chose exports.
4) Since most all of the goods that you buy are either imported or contain inputs from other countries, what do the trends in the exchange rates you examined tell you about the prices you can expect to pay for goods imported from the country you choose or for products that use inputs from that country (i.e., the exports of your country)?
In a global economy most products contain materials from other countries and that includes food. If you had orange juice today, it may well have come from Brazil. Your computer and your cell phone contain parts from America or Japan or Taiwan or Thailand or one of the European countries or from all of these places. Thus, exchange rates directly impact the prices you pay for goods. This is your chance to learn more about how that works.
5) On the discussion board, share your findings about whether the currency of the country you chose is appreciating or depreciating relative to the US Dollar.
What do you think this means for American imports from your country?
What do you think it means for American exports to your country?
Refer to at least two different concepts from this week’s Chapters. Your illustration of the concepts MUST include an explanation why you think they are relevant to the week’s topic using specific information from the articles, Powerpoint presentations, videos and other research that you have done. Remember to include citations and references as needed.