In a critical essay, analyze how currency depreciation stimulates exports. Evaluate the three major approaches to analyzing the economic impact of currency depreciation: the elasticities approach, the absorption approach, and the monetary approach. Compare and contrast the three approaches and provide examples that distinguish them from each other.
- Your essay is required to be five to six pages in length, which does not include the title page and reference pages, which are never a part of the content minimum requirements.
- Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital Library to find your resources.
- Use Saudi Electronic University academic writing standards and follow APA style guidelines.
- It is strongly encouraged that you submit all assignments into Turnitin prior to submitting them to your instructor for grading. If you are unsure how to submit an assignment into the Originality Check tool, review the Turnitin—Student Guide for step-by-step instructions.
- Review the grading rubric to see how you will be graded for this assignment.
- For Your Success
- The module emphasizes the elasticity approach to depreciation. A currency depreciation can lead to an improvement in a nation’s trade position. Consider this question as you progress through the module: Under what circumstances this could happen? Pay attention to the J-curve effect and the extent to which exchange rate changes lead to changes in import prices and export prices.This week, you have a Critical Thinking Assignment that is due. Please review the assignment directions now, and contact your instructor with any questions. Additionally, your next quiz encompassing material from Modules 11 and 12, which is a graded exercise for this module, must be completed by the end of this weekLearning Outcomes
- Analyze how the exchange rate adjustments affect the balance of payments.
- Evaluate how currency depreciation stimulates exports.
ReadingsRequired:Chapter 13 in International EconomicsSule, I., & Shuaibu, M. (2020). Current account behavior, real exchange rate adjustment and relative output in Nigeria. Journal of Economic Development, 45(3), 77-99. Recommended: Chapter 13 PowerPoint slides Chapter 13 PowerPoint slides – Alternative Formats – International EconomicsRappeti, M. (2020). The real exchange rate and economic growth: a survey. Journal of Globalization and Development, 11(1).https://doi-org.sdl.idm.oclc.org/10.1515/jgd-2019-0024