Explain why a stronger dollar could enlarge the US balance of trade deficit.

International Finance

Assessment Component 001 Requirements and Guidance

Coursework: A 2,000 words academic essay.

Submission: Online submission via Turnitin on module Weblearn

Contents: The required academic essay should include the following sections:

1. Learning experience (200 words)

Reflectively discuss the new knowledge you have learnt during the first 6 weeks of

the lectures and seminars of this module.

2. The theory of absolute advantage and comparative advantage (500 words)

What are absolute advantage and comparative advantage? Explain these two concepts and demonstrate your understanding by using a two-country and twoproduct model. To simplify, the resources required for production are measured by hours needed to produce certain goods.

3. Forward and future contracts (300 words)

Compare and contrast forward and future contracts by discussing a minimum of six differences between them.

4. The trade balance and J-curve effect (500 words)

Explain why a stronger dollar could enlarge the US balance of trade deficit.

A floating exchange rate will adjust to reduce or eliminate any current account deficit

Is this statement accurate? Discuss

What is a “J-curve effect”? Explain

Note: This academic essay should also include a brief introduction and good conclusion.

The above word count is given only to the main sections of the essay.