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Does dollarization benefit developing countries?
Dollarization occurs when a nation allows the currency of another nation to be used as a legal currency. That is partial dollarization. Full dollarization, while less frequent, occurs when a nation discontinues it’s own currency and replaces it with the currency of another country. Most commonly the foreign currency is the US Dollar, but the Euro is used by a number of European countries that are not part of the European Union.
Review the Dollarization document provided, information in the textbook, as well as web based sources. A good approach is to examine a specific country that has dollarized. Dollarization
You then take the information you have learned and present it as a formal case study report. For this case a specific recommendation is not required. After a discussion of what dollarization is and the advantages and disadvantages of dollarization, you would conclude with a brief review of the conditions under which a country would benefit from dollarization. That becomes an implicit recommendation to dollarize when those conditions exist. Alternatively, if you conclude that dollarization is not a benefit, then you would explain why you recommend that nations not dollarize.
Case Studies follow the following general format:
•An
Introduction
where you explain the situation and the decision(s) facing the firm. Most, if not all, of this information will be in the case.
•Alternatives
: here you define terms as needed and identify the alternative available to the firm.
•Evaluate the alternatives
: discuss the advantages and disadvantages of each of the relevant alternatives.
•Recommendation and conclusion
: select one of the alternatives as your recommendation. Support your recommendation with information used in your case analysis.
Provide
specific and detailed
recommendations.
•Use additional resources as needed, but remember to cite and reference them properly using APA style. (Apa.pptx).
•In a case you apply your knowledge of the material being covered in the class. As well as using your analysis skills as applied to the case information.
Note: For a short case such as this one, the Alternatives discussion can be combined with the Evaluation discussion as single section of your case.
Be sure to include APA formatted citations and references.
Citations in the body of your case and references are required.
(Apa.pptx).
Your final case is due by 11:59:59 pm Sunday, and your case should consist of a miminum of 500 words.
Post your work to the Reseach Forum board by clicking on Create New Thread.
Do not upload it as a Word file.
You can edit your work here throughout the week, if you want to modify your case in response to feedback or other new information. The purpose of this exercise is to demonstrate your understanding of the material.
Remember to include a word count at the bottom of your case.
Now click on the Case Study text link above and go to the research forum.
You can start a new thread by clicking on the Create Thread button at the top. You can also respond to an existing post by clicking the Respond button at the bottom of the post.
Case 1 (250 Words)
“Sorting among the Multipliers”
The head of the central bank of a small African nation is trying to determine whether the M1 or M2 money multiplier has been more stable during recent years, in the hope of deciding which monetary aggregate to emphasize during the next few years. Studies by economists at the central bank indicate the following:
· The ratio of excess reserves to transactions deposits has been highly variable and is likely to remain equally volatile during the next several years.
· The currency-deposit ratio has been and is likely to remain relatively stable.
· The ratio of non-transactions deposits to transactions deposits increased by a factor of 10 during the past five years and may increase by an equal magnitude during the coming five years.
· One final piece of information is that the required reserve ratio is equal to 20 percent for both transaction and non-transaction deposits.
Given this information, which monetary aggregate should the central bank head choose to emphasize?
Case 2 (550 Words)
Does dollarization benefit developing countries?
Dollarization occurs when a nation allows the currency of another nation to be used as a legal currency. That is partial dollarization. Full dollarization, while less frequent, occurs when a nation discontinues it’s own currency and replaces it with the currency of another country. Most commonly the foreign currency is the US Dollar, but the Euro is used by a number of European countries that are not part of the European Union.
Review the Dollarization document provided, information in the textbook, as well as web based sources. A good approach is to examine a specific country that has dollarized.
You then take the information you have learned and present it as a formal case study report. For this case a specific recommendation is not required. After a discussion of what dollarization is and the advantages and disadvantages of dollarization, you would conclude with a brief review of the conditions under which a country would benefit from dollarization. That becomes an implicit recommendation to dollarize when those conditions exist. Alternatively, if you conclude that dollarization is not a benefit, then you would explain why you recommend that nations not dollarize.
Case Studies follow the following general format:
· An Introduction where you explain the situation and the decision(s) facing the firm. Most, if not all, of this information will be in the case.
· Alternatives: here you define terms as needed and identify the alternative available to the firm.
· Evaluate the alternatives: discuss the advantages and disadvantages of each of the relevant alternatives.
· Recommendation and conclusion: select one of the alternatives as your recommendation. Support your recommendation with information used in your case analysis.
· Provide specific and detailed recommendations.
· Use additional resources as needed, but remember to cite and reference them properly using APA style. (Apa.pptx).
· In a case you apply your knowledge of the material being covered in the class. As well as using your analysis skills as applied to the case
