assignment in Macroeconomics [ Application Paper ]

Please follow the instructions carefully!

Required Resources:

• Brief Principles of Macroeconomics, 8th edition by N. Gregory Mankiw

Resources

Read/review the following resources for this activity:

  • Textbook: Chapter 13
  • Videos relating to Chapter 13
  • Link (website): Yahoo Finance
  • No outside sources are required

Introduction

In this paper, you will apply what you have learned in Chapter 13 to the firm or business you selected in order to see how the concepts can be applied to a business situation.

Keep in mind that throughout this course, papers are intended to bring real-world situations to the course material that we are covering each week. Part of your grade will depend on the connections you make between your chosen firm (which could include the economic environment of your chosen firm, the markets in which your chosen firm interacts with outside actors, the decisions your chosen firm makes, etc., depending on the particular question) and the material from the chapters we covered.

Activity Instructions

There are many places on the internet where data regarding exchange rates can be found. One of these places is Yahoo Finance (linked in Resources section above). If you hover over “Market Data” (found in the list in the upper left hand side of the page) a list of items should appear. Click on “Currencies”. If the pop up does not appear, just click on “Market Data”, and Currencies will be one of the things on the page that appears. For this paper, you will use data from relevant exchange rates; I will explain how to view the chart for one particular exchange rate, the rate between the US dollar and the Japanese yen. To find this chart, click on “USD/JPY”. That will bring you to a page with the current exchange rate and a graph of the day’s movement of the exchange rate. Below the graph in the upper right area of data, click on “5y” which will show the exchange rate’s evolution over the past five years. You can do this with any currency listed (and you can find more currencies by clicking on the regions above the table (the table in which you clicked on “USD/JPY”).

Also, if you need other country’s currencies that you can’t find or identify in the table above, you can click on “Currency Center” at the bottom of the table, and then click on “+Add Currency”. For example, I didn’t know for what CHF stood, so I clicked on “+Add Currency” and then typed “ch” in the first blank; autocomplete identified CHF as the Swiss Franc. I could also choose the Chinese Yuan from the pulldown menu if I wanted to do so. I could then type “USD” in the second blank and choose US Dollar from the drop-down menu and then click “save”. It adds that currency to the table, and I can then click on that new line to get the exchange rate and historical graph just like I did for the US Dollar/Japanese Yen exchange rate.

For this paper, pick a currency or several that have a bearing on the company you chose in Week 1; that could be the currency from the country to which your firm exports, within which a major competitor exists, within which resides a supplier to your firm or a supplier to another competing firm, in which your firm has manufacturing or production lines, or in which your firm has significant assets.

For those currencies, what has happened to the exchange rate over the past five years? Have those currencies become more expensive or less expensive relative to the US Dollar? How have those changes affected your chosen firm’s business environment and profitability? What decisions might your firm have made given the changing exchange rates and what impact would those different decisions have on the firm? Are there opportunities of which the firm could take advantage? Are there risks or costs incurred by the firm?

Writing Requirements (APA format)

  • 1.5-2 pages (approx. 300 words per page), not including title page or references page
  • 1-inch margins
  • Double spaced
  • 12-point Times New Roman font
  • Title page with topic and name of student