Business Question

There are two parts to this assignment.

1-Case Analysis

Read the CASE ANALYSIS: Argentina and the Limits to Macroeconomic Policy on page 266

Write a 4-6 page paper (1000 or more words) in APA format in response to the questions:

Provide a brief overview of this case analysis; summarize the key points (no more than a page, ¾ of a page is better for this summary).

Research current economic data on Argentina. (You may find some information here

http://www.focus-economics.com/countries/argentina

).

Explain why a currency devaluation, whether intentional or not, would be a problem.

The economic data of the current account to savings, investment, and the general government budget balance are calculated at the website listed under Item b. Discuss the pros and cons of current account deficits.

Does it appear that Argentina’s current economic crisis is caused by economic imbalances or caused by volatile capital flows?

Consider the question: Does this mean that developing countries cannot use expansionary macroeconomic policies? Provide an answer to this question.

Below is a recommended outline.

Cover page

Introduction

A thesis statement

Purpose of paper

Overview of paper

Body (Cite sources using in-text citations.)

Provide an overview of this case analysis; summarize the key points

Explain why a currency devaluation, whether intentional or not, would be a problem.

Describe the current financial situation in the country. Analyze the cause of the problem: economic imbalances or volatile capital flows

Consider the question: Does this mean that developing countries cannot use expansionary macroeconomic policies? Provide an answer to this question.

Conclusion – Summary of main points (from the body)

Lessons Learned and Recommendations

References – List the references you cited in the text of your paper according to APA format.

(Note: Do not include references that are not cited in the text of your paper)

2- Quantitative Analysis

Draw a graph of the supply of and demand for the Canadian dollar by the U.S. market. Diagram the effect of each of the following on exchange rates, state in words whether the effect is long, medium, or short run, and explain your reasoning.

More rapid growth in Canada than in the United States.

A rise in U.S. interest rates.

Goods are more expensive in Canada than in the United States.

A recession in the United States.