International Trade: Economic Analysis 5

In 3–4 pages, analyze the concept of exchange rate and explain the purchasing power parity theory of exchange rates. Explain why a quota is more detrimental to an economy than a tariff.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
 

Requirements

This assessment has two parts. Be sure to complete both parts before submitting.

Part 1

• Analyze the concept of exchange rate.
  • Explain how the dollar price of euros is determined.
  • Identify a factor that can increase the dollar price of euros.
  • Identify a factor that can decrease the dollar price of euros.
  • Explain why a rise in the dollar price of euros means a fall in the euro price of dollars.
• Explain the purchasing power parity theory of exchange rates, using the euro-dollar exchange rate as an example.

Part 2

• Explain why a quota is more detrimental to an economy than a tariff that results in the same level of imports as the quota.
  • What is the net outcome of either tariffs or quota for the world economy?

Organize your assessment logically with appropriate headings and subheadings. Support your work with at least 3 scholarly or professional resources and follow APA guidelines for your citations and references. Be sure you include a title page and reference page.

Additional Requirements

• Include a title page and reference page.
• Number of pages: 3–4, not including title page and reference page.
• Number of resources: At least 3.
• APA format for citations and references.
• Font and spacing: Times New Roman, 12 point; double-spaced.
• Must have an introduction and conclusion

International Trade: Economic Analysis 5 Scoring Guide