Analyzing Foreign Exchange and Investment

Your Economics 1 Bus 121 Final Project is being returned to you to make some changes, and then resubmit for grading.

The narrative, although well written, does not address all of the points as outlined by the Project Instructions. Your opinion and analysis for the five year period for both countries selected does not correlate to a Graph or chart that illustrates the currency over a 5 year period, and match the Highs, Lows and Major swings in the currencies. Other points to consider would be natural disasters and weather events, if they impacted the currencies.

Here is a segment of the Project Instructions; however, refer to the Course for the complete Instructions: Decide upon a 5-year period that you will want to analyze. Record the currency exchange rate over the 5-year period showing the “significant” points in time such as:

· The starting point for the 5-year period

· The high points

· The low points

· Any “relatively” major ups and downs in the exchange rate

· The ending point for the 5-year period

· The Main Body of the paper will present your opinion as to why the currency exchange rate fluctuated over the 5-year period. (You are to support your opinion, with at least four in text citations and properly formatted citations on the Works Cited page.)

· The economic analysis needs to include both sides of the currency exchange rate. There can be no exchange rate if there is only one side (one country). Therefore, the analysis must include the selected currency and the U.S. Dollar.

· This analysis can easily be a hundred pages long, if not more. This is not necessary. You are being asked to provide a minimum of 4 pages as a summary for your opinion.

Review the Project Instructions regarding the Analysis. Review the feedback provided with highlighting and Comments located in the far right margin. Note: I did not highlight or comment on everything in your paper; however, take the information provided, and review your work for similar issues. It is the student’s responsibility to review their own work, and insure the submission meets the requirements as outlined by the Assignment Instruction.

Grader: MAR Date: 6/23/2020

Plagiarism is the practice of taking someone else's work or ideas and passing them off as one's own.

Work and/or figures that are not your own need to be cited as part of a paper. This should be in the form of properly formatted citations to include in-text citations. Citations should follow APA formatting.

 

If you do not remember how to make a properly formatted APA citation, go to the Purdue OWL (Online Writing Lab) website by doing the following:

1)      do a search on the Internet for “Purdue OWL” and go to the homepage

2)      in the menu on the left, click on “Research and Citation”

3)      from the drop down menu click on “APA Style”

4)      then click on “APA Formatting and Style Guide”

5)      finally, select “Reference List: Electronic Resources

 

Alternatively:

1. Go to Penn Foster’s Writer’s Block

http://pflibrary.pennfoster.edu/writersblockhomepage.

1. Telephone and speak with an English instructor to refresh your memory on how to make a proper citation.

1. Go to Penn Foster’s Learning Resource Center  http://pflibrary.pennfoster.edu/learningresources/writingandresearch

Right in the middle, there is  “block” that is titled Writing, Research Skills, APA, and MLA Citation

In that section, there are two links:

The Citation Conundrum: An Overview of MLA Format

Tips to Avoid Plagiarism - Learn How to Cite in APA!

These go to a 1 hour video each about how to make proper citations using APA and MLA.

Grader: MAR

ANALYZING FOREIGN EXCHANGE AND INVESTMENT

The currency of my choice is the Canadian currency. The exchange rate is one of the expensive fees of one country money, for instance, the US dollar expressed in another currency of a different nation such as the Canadian dollar, UK pound. Canada's exchange rate has always been flexible. It was 0.88, then increased till 2008 and decreased in 2009 as a result of a recession. The exchange rate is affected by domestic and external aspects that connect. The factors are interest rates, public debt, economic performance, inflation rates, and modern nation's account balance. Comment by Reeley, Mary Ann: Review the tools at the top of your paper to better understand what an Introduction should look like. The Introduction provides your Reader with what you will be discussing or analyzing in the body of your paper (beginning in the following paragraph). Properly formatted in-text citations are required in this paragraph to give credit to the author of the information. One or more citations may be required in this paragraph. Use the tools provided at the top of your paper to better understand when and how to use an in-text citation. Then, use the information to properly format the in-text citation. Finally, once you have made all of the corrections, resubmit your paper for grading. One tool is: https://www.citationmachine.net/apa/cite-a-websiteRemember to properly in-text cite information that is not unique to you. Not all of the occurrences of missing in-text citations have been highlighted or flagged. It is the student’s responsibility to identify when an in-text citation is needed and provide the in-text citations, using the correct format.The paper will be graded when submitted the next time. Comment by Reeley, Mary Ann: These Comments are for the Table. Please review the Project Assignment Instructions. I have posted a segment of the Instructions at the top of your paper; however, refer to the Course for the complete Assignment Instructions. Why are you comparing the other currencies to the Canadian Dollar? Review the Assignment Instructions.Remember to properly in-text cite information that is not unique to you. Not all of the occurrences of missing in-text citations have been highlighted or flagged. It is the student’s responsibility to identify when an in-text citation is needed and provide the in-text citations, using the correct format.The paper will be graded when submitted the next time.

Canada currency economic analysis Comment by Reeley, Mary Ann: If this is a Header, then it should be Centered and Bold. ( Canadian Currency Economic Analysis)

The economic analysis of Canada comprises of the Gross Domestic Product (GDP) of the nation from 2006 to 2016 and what forecasters expected in 2017. The aims & objectives of this

paper are to evaluate the financial performance of Canada. The first top 10 exporters and importers, such as the US, Mexico, and international trade barriers. Canada's economy is one of the fastest worldwide, and the government had a GDP of US$1.53 trillion in 2016. The robust economy progress boosted by its growth in manufacturing, petroleum jelly, and oil sector immediately after the Second World War. The oil industry was affected in 2015 worldwide and barred it from economic growth, exceeding 1.2% compared to that of 2.5% in 2014. Comment by Reeley, Mary Ann: Incomplete sentence. Use a grammar-check and a spell-check tool before submitting any Course work. Comment by Reeley, Mary Ann: Properly formatted in-text citations are required in this paragraph to give credit to the author of the information. One or more citations may be required in this paragraph. Use the tools provided at the top of your paper to better understand when and how to use an in-text citation. Then, use the information to properly format the in-text citation. Finally, once you have made all of the corrections, resubmit your paper for grading. One tool is: https://www.citationmachine.net/apa/cite-a-websiteRemember to properly in-text cite information that is not unique to you. Not all of the occurrences of missing in-text citations have been highlighted or flagged. It is the student’s responsibility to identify when an in-text citation is needed and provide the in-text citations, using the correct format.The paper will be graded when submitted the next time.

Canada and the US share a lot in the international trading industry. Canada exports 80% of its products from the USA. The nation has naturally benefitted from partnering with the US, its economic progress positively regardless of the financial crisis hitting most countries. The US economy nominal GDP is the largest in the world, with an annual GDP of $18.5 trillion. In contrast, the European nation's economy is roughly 24.5% of the gross product worldwide as the US precious natural resources, technology, and infrastructure (The world factbook, 2010). Comment by Reeley, Mary Ann: This Reference is not listed on your Reference page. Review the proper in-text citation format. Nice use of research and identifying the source; correct format.

Canada's trading partners

In the 2016 financial year, Canada's major trading partners; the nation exported approximately (93.1%) it's products were; United States: US$297.7 billion (76.3% of total Canadian exports), China: $15.8 billion (4.1%), United Kingdom: $12.9 billion (3.3%), Japan: $8.1 billion (2.1%), Mexico: $5.8 billion (1.5%), South Korea: $3.3 billion (0.8%), Germany: $3.1

billion (0.8%), India: $3 billion (0.8%), France: $2.6 billion (0.7%), Belgium: $2.3 billion (0.6%), Netherlands: $2.1 billion (0.5%), Hong Kong: $1.8 billion (0.4%), Italy: $1.8 billion (0.4%), Brazil: $1.5 billion (0.4%) and Australia: $1.5 billion (0.4%). From 2009 to 2016 the top importers were improved their purchases from Canada were China (+61.5%), India (+ 57.4%), Belgium (+37.4%), Mexico (+36.7%) and Hong Kong (+33.4%) (Daniel, W, 2007).

Canada's nation top 10 exports resulted to 61.5% of the total value of its international shipments from 2009 to 2016. The top 10 exports were, Vehicles: US$64.3 billion (16.5% of total exports), Mineral fuels including oil: $62.3 billion (16%), Machinery including computers: $30 billion (7.7%), Gems, precious metals: $18.7 billion (4.8%), Wood: $13.2 billion (3.4%), Electrical machinery, equipment: $12.6 billion (3.2%), Plastics, plastic articles: $12.1 billion (3.1%), Aircraft, spacecraft: $10.3 billion (2.6%), Pharmaceuticals: $8.4 billion (2.2%) and Aluminum: $8.1 billion (2.1%) (Daniel, W, 2007). Comment by Reeley, Mary Ann: Another in-text citation that does not have a corresponding Reference on the Reference page. Excellent research; be sure it is all properly cited and referenced.

Economists have defined the Gross Domestic Product as the number of goods and services produced by a country over time. Canada's economy is the backbone. It's Foreign Trade and has led to an approximate growth of 45% of Canada's GDP. The nation's energy is one of the significant export in 2010. From 2010, the GDP of Canada grew by 0.8% in the last quarter of the year. Exports boosted it. All main segments increased their productivity in the 2010 final quarter, excluding the manufacturing industry. The largest sector donating to the GDP advancement was the oil, mining, and gas industry. The nation's worst economic growth year was 2009, the GDP Comment by Reeley, Mary Ann: It is recommended that you not use contractions in Course work. Consider this: would you use contractions in a report that you were preparing for your boss? Probably not. Practice in the classroom for your workplace.

dropped to -2.46%; however, Canada being the leading exporter of several products it bounced back as the GDP positively rose to 3.07%.

US dollar economic evaluation

The United States Dollar is the global currency with which most international trade deals transacted. The country has a fiat currency, meaning that its money is not backed by physical commodities such as gold or silver but by the government's issuing stability. World trade determined through exchange rates. Exchange rates express the cost of a good or service in a common currency. The dollar is used as the global currency because of its high value as compared to other countries—moreover, most of the world's debt issued in dollars. The demand for the dollar has kept the currency secure over time.

The factors that affect the value of the dollar divided into two economic and policy considerations. The demand and supply market determine economic factors. Issues such as interest rates, inflation, lending abilities of banks, and the ratio of exports to imports are the market drivers for currency values. However, the policies a country implements also play a significant role in determining the country's economy. Proper procedures raise the value of the currency, while weak systems depreciate it. Appreciation is the rise in the amount of money, while depreciation is the fall in value.

A country's currency value can either appreciate or depreciate over time, depending on the world economy. Economic and policy factors are the two most significant determinants of the exchange rate of any currency. Systems are principles, rules, and guidelines formulated or adopted

by an organization or country to influence substantial decisions. A country's policy also plays a significant role in determining the value of a currency. The US has the leading world economy because of people's confidence in the country's currency.

Why Canadian and US dollar fluctuated over the past five years

Market speculation is the purchasing or offloading of assets based on the expected future increase or decrease in price. The financial market is a very volatile scene when populated by speculators (Hirota, Huber, Stöckl, & Sunder, 2018, p. 1). Therefore, most investors depend on the market speculators to assist them in making informed decisions on investment. When the dollar expected to lose its value in the future, most investors sell their bonds to avoid making losses and revert to the dollar when speculated to increase in value. While market speculation may not always be correct, its impact on the financial market is significant.

Political instability in a country has a high impact on its economy and currency value. Volatile political environments discourage investors from investing in a country. The amount of currencies of countries at war sometimes decreases to a significant level forcing them to adopt the dollar to keep their economies afloat. Lack of investors causes a decrease in the dollar demand, causing a decline in the value of the dollar. More goods will exist in the market, causing their prices to decline. A decrease in order and an increase in supply causes a surplus of money in circulation, which consequently causes depreciation.

Other than economic factors, the policies implemented in a country also affect the value of their currency. Monetary and fiscal policies have a significant impact on the economy. Monetary

policies are decisions undertaken by the central bank to ensure a consistent supply of money in the economy (Horton & El-Ganainy, 2009). The Federal Reserve could place either restrictive or accommodative monetary policies. Restrictive fiscal policies lower the supply of money in the economy. For example, when the central bank restricts the lending capabilities of local banks by increasing interest rates. Accommodative monetary policies increase the circulation of money in the market by making capital readily available. Restrictive policies boost currency value, while accommodative policies depreciate it.

Fiscal policies use government spending and taxation to influence the economy (Horton & El-Ganainy, 2009). The government's spending raised through taxes or bonds. When the government spends more than the country earns, a budget deficit created, and public debt increases. Other countries and financial lenders, such as the IMF, may tolerate an increase in public debt if a country's ability to meet its obligations is not affected (Horton & El-Ganainy, 2009, p. 53). If the United States defaults on its debts, investors will sell their bonds, causing a decline in the demand for the dollar, consequently leading to a fall in its value.

The dollar's ability to maintain the leading role in transacting international business gives people the confidence to continue using it. With the help of the US policies, the dollar continues to enjoy economies of scale in the world's economy. The dollar is not affected by the fact that it does not have substantial backing in silver and gold. Instead, it continues to dominate world trade, making the US market the world's leading economy. Comment by Reeley, Mary Ann: Is this you Conclusion? Consider beginning your paragraph with…”In conclusion,…” OR use a Conclusion header. When you begin the final paragraph like this, your Reader knows this is where you will bring together all of your research. Remember to use an in-text citation if needed.When you write, “ The dollar’s ability…”, do you mean the US dollar or the Canadian dollar? When writing about 2 things, such as 2 currencies, and they both use the same title/name (such as dollar), you should always identify which country’s currency you are writing about.

References Comment by Reeley, Mary Ann: Exceptional reference and References. You are missing some References that have in-text citations within the paper. Review the APA Reference format, especially the last 2 References.

Federal Reserve Bank of San Fransisco. (2002, October). Retrieved from www.frbsf.org/education/publications/doctor-econ/2002/october/inflation-factors-rise/

Hirota, S., Huber, J., Stöckl, T., & Sunder, S. (2018). Speculation and Price Indeterminacy In Financial Markets: An Experimental Study. Cowles Foundation For Research In Economics. Yale University, Connecticut.

Horton, M., & El-Ganainy, A. (2009). What is Fiscal Policy. IMF, Fiscal Affairs Department. Retrieved from www.imf.org/external/pubs/ft/fandd/2009/06/pdf/basics.pdf

Houck, J. P. (1997). Inflation and international trade. University of Minessota.

Krugman, P. R., & Obsteild, M. (2006).