Internet Exercises


1			The IMF The IMF negotiates with a country to provide financial assistance if the country will agree to adopt certain policies to stabilize its economy from www.imf.org/external/pubs/ft/exrp/differ/differ.htm "The fundamental difference is this: the [World] Bank is primarily a development institution; the IMF is a cooperative institution that seeks to maintain an orderly system of payments and receipts between nations" Find out the mechanism by which the IMF lends money http://fx.sauder.ubc.ca/SDR.html view the SDR fact sheet from UBC Leaders of NGOs like the IMG, World Bank, OECD often seek to gain publicity for their organizations by issuing statements about world events and commentary on the development of situations. The head of the IMF and the World Bank are often quoted in major newspapers and online media sources for their statements on current issues Check the BBC and CCN sites to see what the IMF and World Bank leaders are saying about Iraq and Afghanistan in 2008 From http://www.witiger.com/internationalbusiness/IMF.htm




2			The Coalition for a Sound Dollar http://www.madinusa.org/coalitionforasounddollar.html, composed of 61 trade associations representing a wide range of American industries, is on a mission. After years of lobbying first the Clinton administration, then the Bush administration for a weaker dollar, the organization has recently shifted its strategy to try to persuade the Bush administration to take action against Asian countries including China, Japan, Taiwan, and South Korea which, the organization claims, all maintain artificially low currencies. American companies with their stronger dollar have had difficulty exporting products, while the Asian economies are able to capitalize on their weak currencies and export more. Both Clinton and Bush have more or less allowed market forces to determine the value of the dollar, while Asian countries, according to the organization, intervene in the markets to manipulate exchange rates and provide their countries with an unfair trading advantage. Does the Coalition for a Sound Dollar have a case? In your opinion, should the U.S. put pressure on the Asian economies to raise the value of their currencies? Why or why not? What would be the short-term effect on American companies if Japan allowed its yen to rise relative to the dollar? What are the implications of a stronger yen in the longer term? How will it help Canadian exports if the Asian currencies fall against the U.S. dollar? Why have both Clinton and Bush maintained a policy of allowing market forces to determine the value of the dollar? What are the implications of their policy for international businesses? Source: "U.S. Manufacturers Aim Ire at Asia," The Wall Street Journal, 1/24/03, p. A2.

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