1.

Country A
a. Industrialized
b. OECF member rich country less currency depreciation
than poor countries
c. Manufacturing largest sector
d. High levels of Consumption
e. Entered recession this year
f. Persistent trade and CA deficits
g. Government budget deficit of 1%
h. Became fixed exchange rate 1 year ago
2. Country B
a. Developing country
b. Large amount of natural recourses
c. Exchange rate became fixed three years ago
d. GDP of 40% over the last five years
e. Suffered speculative shock due to neighboring country
i. Capital inflows declined significantly
ii. Low foreign trade component despite actions to
make market most open in world
3. Country C
a. Small developing nation
b. Diversified economy
c. Relatively poor nation
d. Pegged to US dollar each of last 6 years
e. Increasing trade deficit led to increasing CA deficit
f. CA deficit covered by large capital inflows and reserves
i. Only 1.6% net direct investment
4. Country D
a. Last year, exports of merchandise goods equaled 26.5% of
current-price GDP
b. OECD member this year
c. Floating band fixed rate
d. At least 7% GDP growth per year
e. Consistent trade deficit
f. Government has recently encouraged banks and
companies to borrow abroad (Greece?)
5. Country E
a. Fixed currency 7 years ago
b. Has attracted growing amounts of foreign investment in
recent years (3.5% direct investment)
c. After two years the country implemented a crawling peg
exchange rate system
d. Deterioration of trade balance has pushed CA into deficit
e. Joined OECD this year