Turn in Assignment 4 at the end of Lesson 12.
In Lessons 10 to 12, you continued to examine international business issues related to economic co-operation, regional economic integration (trading blocs), and the international monetary system.
This assignment will contribute to the development of your Final Project.
Part A: Economic Cooperation and Regional Economic Integration (30 marks)
Prepare a 2–3-page report (500–750 words, double-spaced) containing the following:
- Of which trading blocs are your two target countries members? If not part of a bloc, which bloc do you think they should join? Describe the advantages and disadvantages of being part of a trading bloc.
- How will Canada’s membership in NAFTA help or hinder your ability to take your product or service to your two target countries?
- What is the difference between a free trade agreement (such as NAFTA) and an economic union (such as the EU)?
- What would be the advantages and disadvantages for Canada to join a customs union with the USA and Mexico?
- What are the stated aims of the Association of South East Asian Nations (ASEAN)? What are the risks of working with a business partner from ASEAN?
Part B: International Money Markets and Foreign Exchange (40 marks)
Prepare a 3–4-page report (750–1,000 words, double-spaced) that responds to the following:
- In many ways, the economy of a country is like the economy of a household. If the household spends more than it earns, then it faces difficult times. On the other hand, if it earns more than it spends, then it can save for a rainy day. Discuss the relevance of this analogy to the economy of a country. In particular, discuss imports, exports, the balance of payments, and the strengthening or weakening of the nation’s currency.
- When the USA experienced high inflation in the 1970s, Canada also experienced high inflation. Indeed, Canada was said to have “imported inflation” from the USA. If Canada’s exports to the USA were high, Canada’s foreign exchange reserves would have increased. Since exports create jobs, how could Canada have imported inflation from the USA?
- Suppose a Canadian firm wants to import canned beef from Brazil. The shape of graph of GDP per capita (in US$) from 1960 to 2005 (below) shows that Canada has a significantly higher rate of GDP increase and a higher rate of exports. Based on these two factors, which country had the harder currency during this period? Why? Which country do had the greater rate of inflation in this period? Why? Find the relevant PPP numbers for each country. Does the result match your analysis?
- Based on the 1960–2005 period, if a Canadian company were to import from Brazil and must pay in Brazilian reias when the goods are delivered in 90 days, should the company get the currency through the spot or the futures market? Why? Would it be different if the company had to pay in US$? Explain.
Part C: International Monetary Systems (30 marks)
Prepare a 2–4-page report (500–1,000 words, double-spaced) to reflect on and compare the current economic, political, technical and financial risks your international business will face entering the two countries you selected.
Considerations might include:
- Economic stability
- Currency fluctuations and inflation
- Rising nationalism and other political uncertainties
- Potential changes in administrative trade barriers
- Accounting practices
- Relevant cultural or technological forces
A quick search of reliable Internet sources may help you formulate some thoughts about these and other factors and current events that will impact your planning. There is no right or wrong answer to this question. This is your opportunity to show your ability to look at data and draw some evidence-based conclusions that demonstrate your understanding of how political and economic pressures impact currency flows and international business.
Journal Reflection 2 (5%)
See your Course Guide for instructions, topics, and marking information.
Module 3 and Module 4 require your participation in the reflection topics listed in the discussion board. At the end of Module 4, include a report of your reflections in Assignment 2.
The journal reflection requires you to look back at your contributions and to reflect on your learning experience.
Consider the following reflective questions:
- Did the topics for reflection and the ideas and information you explored influence your understanding of or perspective on international business?
- Did your ideas and views shift as you progressed through the course?
- Did the contributions of other learners influence you and help enrich your knowledge of international business?
- Did you agree with everything others posted on the discussion board?
Write a paper (approximately 500 words) reviewing your journalling activity and contributions to the reflection prompts/questions of modules 3 and 4. The journal reflection requires you to look back at your contributions and to reflect on your learning experience. Document your best journal reflections. Also, you may include highlights from other activities and the course in general.
Consult the Journal Reflection Rubric on the Home Page, and then assign yourself a mark. Your Open Learning Faculty Member will verify your report and adjust your mark as she or he sees fit.
For further reading about journalling, please read Appendix C: Becoming a Reflective Learner.