ECON 1 Lecture Notes - Lecture 5: United States Dollar, Capital Flight, Currency Substitution

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indigoworm781

3 May 2020

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It is no secret that in most of the world and mainly in. Venezuela, is a rejection of their national currencies. they treasure the dollar, since it is the stable currency and is valued day after day, Rep blica, highlights that "argentina and venezuela continue to lead the list of latin american countries with a double-digit variation in the consumer price index. " It is not easy in countries with high inflation to control the fall of the currency without applying restrictive exchange measures that, for many, turn into abuse by the state towards its citizens. This is where uncertainty arises if a country should move towards dollarization. For a country to adopt the dollar as its official currency is not an easy decision since it has its advantages and disadvantages, let"s analyze what this implies: In the case of countries like nicaragua and.

Related Questions

Foreign exchange markets make it possible for trade to be enacted between countries without lengthy negotiations on trade terms. The exchange rate mechanism is a relatively stable process whereby different currencies can be exchanged in an orderly manner in conformity to the rules of currency exchange rates. Factors, such as the relative inflation and unemployment rates between the trading partners, affect the value of each country's currency in relation to the other countries' currency. The country with higher inflation and unemployment will have the lower valued currency.

(A.) Why is the foreign currency exchange market important to a business?

(B.) What is the benefit of the foreign currency exchange market to the U.S. company?

(C.) If the U.S. currency is decreasing versus other currencies of countries it trades with, how will that affect the U.S. company? If the reverse is true, how will that affect the US company?

orchiddonkey965

For questions 1, 2, 3, and 6 you are welcome to use Wikipedia. However, you should cite at least two other sources in each question. Your sources should be identified at the end of each answer. As you can see by now many of the assignments are very important to our understanding of the topics, but they have not been integrated as well into the course as I would like. This assignment is very different. Much of the discussion here is to better understand Latin America, a region of the world that we will need to skip because of time constraints. Some of you will be writing a country report about one that uses ISI. Some of this information may be useful to include in your report. Other sources you could consult are in the reference section of the library or you can ask a librarian for help. 1. What is Import Substitution Industrialization? (between 200-400 words) 2. Raul Prebisch was one of the prominent proponents of ISI, write a short biography of him (between 200-400 words) 3. Explain why Prebisch and others proposed ISI (up to 250 words). 4. Visit the site EconoMonitor and once there search for the article On Populism in Argentina (and other Latin American Countries) by Nicholas Magud published June 25th, 2008. Summarize it. 5. Brazil, Argentina, Peru, Mexico, and Bolivia among many countries followed both ISI and Economic populism. Visit the IMF site at www.imf.org and click on Data and Statistics, then click on World Economic Outlook Databases, select the October 2014 database,and select By Countries, next Latin America and the Caribbean. Find inflation in percent change for Argentina, since 1980 to date and graph the data in several sub-periods so it can show the different inflation rates better. In a couple paragraphs describe what you see. 6. Brazil, Chile, Peru, Bolivia, Argentina, and India followed ISI and different levels of Economic Populism, choose one of these five countries and explain when your selected country followed ISI and when it stopped following ISI? Why did your country stop using ISI? What were the consequences of ISI and Economic Populism in your country? (no less than 250 words and up to 700 words)

jadellama35

Need a discussion post on the following

A) Go to the X-Rates Web site (http://x-rates.com) and find the current exchange rate for the US Dollar (USD) and Mexico currency.

B) Then, from the icons below the currency selection boxes, select Graphs and then select 1 year 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.

C) Now go to the CIA World Factbook and find out what goods and products Mexico exports. 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 Mexico or for products that use inputs from that country (i.e., the exports of your country)?

D) 1. On the discussion board, share your findings of whether Mexico's currency is appreciating or depreciating relative to the US Dollar.

2. What do you think this means for American imports from Mexico?

3. What do you think it means for American exports to Mexico?

orangeseal823

ECON 1 Lecture Notes - Lecture 5: United States Dollar, Capital Flight, Currency Substitution

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