1- Select Country: I choose FRANCE 2. Visit www.bea.gov. Use this website to as

1- Select Country: I choose FRANCE
2. Visit www.bea.gov.
Use this website to assess recent trends in exporting and importing by U.S. firms. How has the balance of trade changed over the last 12 months?
3. Offer possible reasons for this change in the balance of trade. Please provide evidence for
your reasons. Reasons without evidence will not earn points.
4. Visit: https://www.census.gov/foreign-trade/balance/index.html.
Obtain monthly balance of trade data for the last 36 months between the U.S. and your selected country. Import
this data into Excel and derive the percentage change in the trade balance for each month.
5. Visit: http://fx.sauder.ubc.ca/data.html.
Here you can obtain the monthly foreign exchange
rate between the USD and the currency of your selected country. Import this data into
Excel and derive the percentage change (rate of appreciation/depreciation) between the the
USD and your selected countries currency.
6. Apply regression analysis in which the % change in the trade balance is the dependent
variable and the % change in the exchange rate is the independent variable.
a. Is there a significant relationship between the two variables?
b. Is the direction what you expected?
c. Could changes in exchange rates impact balance of trade with a lag? Provide an explaination.
d. Reconfigure your data and estimate regressions where % change in balance of trade
is the dependent variable and % change in exchange rates (with one month’s lag)
is the independent variable.
e. Reconfigure your data and estimate regressions where % change in balance of
trade is the dependent variable and % change in exchange rates (with two month’s
lag) is the independent variable.
f. Explain your results in 2-3 paragraphs