While Saudi Arabia seeks to diversify its economy, the Saudi economy is dominated by the petroleum sector. In addition, the Saudi Arabian Riyal (SAR) is pegged to the U.S. Dollar.
1/ In a critical essay, discuss the advantages and disadvantages of the pegged exchange rate.
2/ Indicate the main considerations Saudi Arabia faces from a currency perspective (e.g., currency values, interest rates, inflation, and trade issues) that ensue given two scenarios:
The first scenario is a dramatically declining world oil price.
The second scenario is a dramatically increasing world oil price.
Directions:
Your essay is required to be four to five pages in length, which does not include the title page and reference pages, which are never a part of the content minimum requirements.
Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital Library to find your resources.
Use Saudi Electronic University academic writing standards and follow APA style guidelines.
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Review the grading rubric to see how you will be graded for this assignment.
