Is a trade deficit bad? Check all that apply. a. Yes, if current consumption is lower, and investment is higher. b. No, if economy provides an attractive investment environment. c. Yes, if borrowing from foreigners is used to increase current consumption. d. No, if it increases current consumption.

Is a trade deficit bad? Check all that apply. a. Yes, if current consumption is lower, and investment is higher. b. No, if economy provides an attractive investment environment. c. Yes, if borrowing from foreigners is used to increase current consumption. d. No, if it increases current consumption.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 46P: Imagine that the economy of Germany finds itself in the following situation: the government budget...

See similar textbooks

Related questions

Q: Suppose that in the country of Mistania, investment spending increases from $1740 to $1940. There is…

Q: What is meant by deficit in balance of payments?

A: The balance of payments takes into account the inflow and outflow of the money for a country. It is…

Q: a)In the two-period small open economy model, explain how the nation makes its choices. b) In the…

A: An open economy is a kind of economy where domestic elements as well as substances in different…

Q: Would each of the following groups be happy orunhappy if the U.S. dollar appreciated? Explain.a.…

A: Currency Appreciation: Currency appreciation means an increase in the value of domestic currency…

Q: Confidential 5. In a small open economy, desired national saving, Sd = $10B + $100B X desired…

A: A small open economy, truncated to SOE, is an economy that partakes in global exchange, however, it…

Q: In an open economy, national saving equalsdomestic investmenta. plus the government’s budget…

A: An open economy represents that economy that establishes contact with the rest of the world in terms…

Q: Net exports and net capital outflow: 1. Which of the following statements about a country with a…

A: Trade deficit is a situation where the total exports of the economy will be lower than the imports…

Q: If the economy is in equilibrium, and the budget deficit = zero, the trade deficit = $200 and…

A: Saving = Investment + Budget (G-T) + Net exports(X-M) = 300 + 0 + -200 Savings = 100

Q: The great country of Naboombu has private savings of $700 billion, investment of $800 billion, tax…

A: Government surplus refers to the money left with the government after carrying out developmental…

Q: Suppose the Current Account has a deficit of 300 and we invest 200 overseas. What inflow of foreign…

A: Following the guidelines, 1st 3 questions are answered. BOP is sum of current account, capital…

Q: Critical Thinking: Let's make it as realistic as possible to the US. In 2020, the US had both a…

A: The circular flow of income, also known as the circular flow, is an economic model in which major…

Q: Discuss the ways that running a trade deficit could result in either a healthy economy or a weaker…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: A pro-savings policy by the US would likely reduce the US trade deficit.True/False and Explain

A: Saving policy will help US to reduce the trade deficit as when the consumption will reduce and…

Q: Assume that GDP is $6500, personal disposable income is $5600, and the government budget deficit is…

A: Saving refers to the portion of disposable income after made all the expense. In other words, saving…

Q: (a) Define the concept of trade deficit and specify the relationship between the trade balance and…

Q: What explains Australia's recent large trade deficits? A. Unfair trade practices by Australian…

A: Trade deficit: An import/export imbalance is a sum by which the expense of a nation's imports…

Q: The figure below shows the flow of goods, services, and payments between Kenya (home country) and…

A: 1) The top section keeps track of the flow of exports and imports, as well as the payments…

Q: “The impacts of a (a) budget deficit and (b) capital flight on the equilibrium in the open economy…

A: A budget deficit is a financial scenario in which a country's government borrows more than it earns…

Q: Problem 2. Answer the following questions briefly. a) What items are excluded from the calculation…

A: a) Basically, something has to be produced in order for it to be included in our GDP. It must be…

Q: Question 2 (a) Distinguish between a government deficit and trade deficit? (b) Would you rather live…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Government budget deficit constitutes 5 % of GDP, current account surplus is 100, disposable ncome…

A: Given information Budget deficit=5% of GDP Current account surplus=100 Disposable income=2000

Q: (a) Distinguish between a government deficit and trade deficit? (b) Would you rather live in a…

A: Fiscal Deficit A Government Deficit is the amount of money in the established budget by which…

Q: ) True or False? In Mankiw’s model of an open economy, the demand for loanable funds has two…

A: a) Mankiw's model of an economy, the demand for loanable funds has two components: one is the need…

Q: What measures can be taken by the government to correct the trade deficit?

A: (Since you have posted multiple questions, we will answer the first one for you. If you want a…

Q: If a country is experiencing a budget deficit and the government reduced spending, resulting in a…

A: The situation that occurs when there is excess expenditure over revenue that impacts the financial…

Q: Holding other things constant, an increase in anation’s interest rate reducesa. national saving and…

A: The final determination of the exchange rate of a currency with other currencies is the product of a…

Q: What is ? 1-)Balance Of Payments 2-)Trade Deficit 3-)J-Curve Effect

A: The method used to monitor all the international transactions of a country, in a given period of…

Q: (a) Distinguish between a government deficit and trade deficit?

A: Deficit alludes to the circumstance when the use surpasses the pay of an individual or a firm. The…

Q: Suppose that during 2004, country A had exports of goods of $50, imports of goods of $60, exports of…

A: Current account records all the economic transactions between residents of one country and rest of…

Q: i) In an open economy, Y = C + I + G + NX. Using symbols from this identity, write an expression…

A: The identity for national income in an open economy is Y: National Income C: Consumption expenditure…

Q: a Figure 1 shows the exogenous world interest rate (r*) determines the level of investment (I) and…

A: In Internation trade, factors such as exchange rate and purchasing power parity can have an impact…

Q: 1. Other things equal, what is the likely impact of a U.S. trade deficit on 1. the current account?…

A: An import/export deficit is a sum by which the expense of a nation's imports surpasses its…

Q: We may use the diagram below (Figure 2, panel (a)) to assess whether trade deficits are bad. Use the…

A: Trade deficit refers to the value of import of goods and services exceeds the value of export of…

Q: Other things equal, if the United States continually runs trade deficits, foreigners will own U.S.…

A: Trade deficit refers to the situation where the imports of the country are much higher than the…

Q: Imagine that the economy of Germany finds itself in the following situation: the government budget…

A: The national investment and national saving identity explains the relationship between the total…

Q: If a country is experiencing a budget deficit and the government reduced spending, resulting in a…

A: The process of budgeting where the total planning spending is equal to total expected revenues is…

Q: Explain how current account and budget deficit (twin deficit) are related so that changes in one are…

A: The current account is the record of a country's imports (M) and exports of goods and services,…

Question

Is a trade deficit bad? Check all that apply.

a. Yes, if current consumption is lower, and investment is higher.

b. No, if economy provides an attractive investment environment.

c. Yes, if borrowing from foreigners is used to increase current consumption.

d. No, if it increases current consumption.

Definition Definition Situation in which a country spends more on imports than it makes through exports. When a trade deficit exists, net exports will be negative. Trade Deficit = (Imports) - (Exports)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

If a country is running a government budget surplus, why is (T - G) on the left side of the saving-investment identity?
Many think that the size of a trade deficit is due to a lack of competitiveness of domestic sectors, such as autos. Explain why this is not true.
A government official announces a new policy. Thecountry wishes to eliminate its trade deficit, but willstrongly encourage financial investment from foreignfirms. Explain why such a statement is contradictory.
C. What measures can be taken by the government to correct the trade deficit? (3 Mark) D. Is Pakistan a closed economy in terms of trade? Comment.
We often hear that trade deficits are bad for a country. Should we agree or disagree with this viewpoint?
What is a trade deficit? a) When a country exports more goods than it imports b) When a country's imports and exports are balanced c) When a country imports more goods than it exports d) When a country has no international trade
Very short answer question What is meant by deficit in balance of payments?
a. Discuss the ways that running a trade deficit could result in either a healthy economy or a weaker economy b. What factors determine a country’s level of trade? What is the difference between the balance of trade and level of trade?
What is current account deficit? List down, with detailed explanations, what causes current account deficit in the economy.
provides some hypothetical data on macroeconomicaccountsforthreecountriesrepresented by A, B, and C and measured in billions of currency units. In Table, private household saving is SH, tax revenue is T, government spending is G, and investment spending is I. a. Calculate the trade balance and the net inflow of foreign saving for each country. b. State whether each one has a trade surplus or deficit (or balanced trade). c. State whether each is a net lender or borrower internationally and explain.
In an open economy, national saving equalsdomestic investmenta. plus the government’s budget deficit.b. minus the net exports of goods and services.c. plus the net outflow of capital.d. minus foreign portfolio investment
How does a growing trade deficit affect a country's GDP? Explain your answer.