Semester:

Spring 15

Course
Code:

ECON 206

Assignment 25/3/15
Date:
Course Global Economy
Name:

Assessmen Assignment
t:

Student
Name:

Duration:Submit by 12/4/15 (In hard and

soft copy both)

Student ID: BBA1321719

Rafal raad
Hamda Halim

BBA1412074

Awarded
Mark:

Total Mark:15

Course Learning Outcome Contribution

CLO 1
Max
Mark
Awarde
d

CLO 2

CLO 3

CLO 4

CLO 5

CLO 6

CLO 7

1. Take any two countries of world like UAE and USA and analyse any latest trade
relation may be restriction or lifting ban between them focusing on
1) Apply the aggregate demand and supply theories in both the countries
because of the trade relation. (CLO3 ( 7 marks)

The United States and the UAE enjoy

a significant trade and investment relation, the majority of it has
little direct relation to UAE oil exports. And its one of the fastest growing USA
economic partnerships, both globally and particularly in
the GCC region. The UAE is definitely one of the
most open economies around the world, And also its dynamic economic ,

This relationship shows the UAEs position as a regional leader in terms of

economic transform, and
openness to international trade and investment, and political stability. In the
year 2012, the UAE and US form an Economic Policy Dialogue (E.P.D.), which
will perform platform to developing unique initiatives that are created
to strengthen the economic, trading and commercial partnerships} between
the two countries.
The UAE and the USA established on May / 2007 of a US - UAE Business
Council , demonstrate on expanding the commercial relationships .
Also in 2012, the UAE was the major export markets in the Middle East for
the USA. From 2011 to 2012, the entire trading volume between the United
Arab Emirates and united states of America increased to more
than $24.5 billion, growth from $16.8 in year 2011. and was
sustained by rise in exports from the USA to
UAE. Total exports from US to UAE reach $22. billion , a 38%raise more than
the year 2011. Imports into US from UAE stayed balanced at over $2 billion.
Also UAE has trade relation with every states in the US, as well with
Columbia and Virgin Island. Also there is a strong relation between both
countries as the united Arab emirates pegs its currency UAE dirham ( AED) to
the US( $ dollar).over 1000 US organization have a presence in united Arab
emirates, like Bechtel and ExxonMobil , Starbucks also Cold Stone Creamery
and many others .As a result of valuable investment in the USA for more 30
years, UAE has being a dependable also long-term contributor to US overall
economy supplying market liquidity to united states of America
capital market, and a growing for US companies also safety work place for
US worker ,as we as UAE making significant investments in the
US that span all over different industries such as
manufacturing, informations technology and financial service, real
estates , aviations market . in the same time , US businesses progressively
making a presence in the UAE with more than 800 hundred currently
established many firms, not only in order to service the domestic current
market, but as well as to benefit from the UAE s strategic position which
allows access to more than 3 billion consumers in this region .

In a similar way the overall economy of the UAE flourish since it continues is
continuing to serve as a strategic center for leading US companies in
banking, retail, finance, consulting, and defense and education sectors. As
the UAE national economy is continuing to expanding

2) Evaluate their fiscal or monetary policy due to trade relation (CLO 4 (8

marks)
As per the strong relationship between the two countries UAE use
monetary policy with USA as we know the united Arab emirates
pegs its currency UAE dirham ( AED) to the US( $ dollar). Definitely
the central bank of UAE injects Dirham liquidity in situations
when a bank require access to Dirham. Swap arranging contain a
associated with sale and forwards purchasing Us dollars against
the purchase forwards sale of equal value of Dirham amount for
a fix term at specific rate .The main duties of the Central Bank is
an dynamic expansionary policy that is committed to generating
the preferred economic goals with stable rates
The Central Bank is also working
to {maintaining fixed exchange rate of the dirham AED against
the U.S. $ dollar and to guarantee the free of cost convertibility of
the national currency into foreign currency, and additionally to its
own task as "Bank of Banks" and Government's bank and
its {financial consultant . in the same time the most efficient

countries in term of governments fiscal policy as we know the open

market of UAE with USA for exporting and importing many services
and goods and huge investments in different sectors like
infrastructure and aviation all this with the terms of fiscal policy .
References.:
http://usuaebusiness.org/initiatives/commercial-trade/
http://www.uaetrade-usa.org/082411.pdf
http://dalmacapital.com/commentary&id=926&title=The%20Effects%20of%20US
%20Monetary%20Policy%20on%20UAE%20Investors%20and%20Borrowers