Module 16 Assignment: Exchange Rates and International Finance

Changes in the value of a nation’s currency affect the nation’s net exports, and thus GDP. How might this make a large country, like the U.S., more willing to adopt a flexible exchange rate regime than a small country, like Belgium?


Criteria Not Evident Developing Proficient Distinguished Weight
Why do large countries, like the U.S., typically have a lower portion of their GDP as exports and imports, than a small country like Belgium?
How does the size of a nation’s trade sector affect the stability of its GDP? 3
How do exchange rate fluctuations affect a nation’s GDP? 4
Why might a large country be more willing to adopt a flexible exchange rate than a small country would? 6
Write up your analysis using correct language, explaining all your work 3