The purpose of this assessment is to analyze two scenarios and use the principles of international trade.
Analyze the given scenarios and based on international trade and currency depreciation, answer the related questions.
- Scenario 1: Suppose the signs of an improvement in the U.S. economy lead international investors to resume lending to the U.S. government and businesses. Policymakers, however, are worried about how this will influence the dollar. How would this event affect the market for the dollar? How should the central bank, the Fed, respond to this event if it wants to keep the value of the dollar unchanged?
- Scenario 2: In 2014, the European Union banned the import of Indian mangoes. Recently, the ban was lifted and Indian mangoes were allowed to be imported in the European Union. Compare and contrast the change in the prices of mangoes in the local Indian market before and after the lifting of the ban.
Submit your response in a Microsoft Word document with the following specifications:
- Font: Arial; Point 12
- Spacing: Double
- Page length: 3 pages
The Analysis assessment will be evaluated using the following criteria:
- Did you explain the effect of international lending on the value of dollar?
- Did you explain how should Fed respond to keep the value of dollar unchanged?
- Did you compare and contrast the change in the prices of mangoes in the local Indian market before and after the lifting of ban?
- Did you use macroeconomic terminologies in your analysis wherever possible?
- Did your thoughts flow coherently?
- Did you meet the page length requirements?
- Did you adhere to Standard English grammar, spelling, and punctuation requirements?