International Finance and Monetary System - Economic Cooperation and Regional Economic Integration - Finance Assignment Help

Assignment Task :

Introduction

In Lessons 10 to 12, you continued to examine international business issues related to economic co-operation, regional economic integration (trading blocs), and the international monetary system.

Note

This assignment will contribute to the development of your Assignment 5.

Part A: Economic Cooperation and Regional Economic Integration 

Prepare a 2–3-page report (500–750 words, double-spaced) containing the following:

1. Of which trading blocs are your two target countries members? If not part of a bloc, which bloc do you think they should join? Describe the advantages and disadvantages of being part of a trading bloc.

2. How will Canada’s membership in NAFTA/CUSMA help or hinder your ability to take your product or service to your two target countries? Discuss challenges and opportunities for Canadian companies working under the new Canada-US-Mexico Agreement (CUSMA).

3. What is the difference between a free trade agreement (such as NAFTA/CUSMA) and an economic union (such as the EU)?

4. What would be the advantages and disadvantages for Canada to join a customs union with the USA and Mexico?

5. What are the stated aims of the Association of South East Asian Nations (ASEAN)? What are the risks of working with a business partner from ASEAN?

Part B: International Money Markets and Foreign Exchange (40 marks)

Prepare a 3–4-page report (750–1,000 words, double-spaced) that responds to the following:

1. In many ways, the economy of a country is like the economy of a household. If the household spends more than it earns, then it faces difficult times. On the other hand, if it earns more than it spends, then it can save for a rainy day. Discuss the relevance of this analogy to the economy of a country. In particular, discuss imports, exports, the balance of payments, and the strengthening or weakening of the nation’s currency.

2. When the USA experienced high inflation in the 1970s, Canada also experienced high inflation. Indeed, Canada was said to have “imported inflation” from the USA. If Canada’s exports to the USA were high, Canada’s foreign exchange reserves would have increased. Since exports create jobs, how could Canada have imported inflation from the USA?

3. Suppose a Canadian firm wants to import canned beef from Brazil. The shape of graph of GDP per capita (in US$) from 1960 to 2005 (below) shows that Canada has a significantly higher rate of GDP increase and a higher rate of exports. Based on these two factors, which country had the harder currency during this period? Why? Which country do had the greater rate of inflation in this period? Why? Find the relevant PPP numbers for each country. Does the result match your analysis?

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