Trade Deficits and J-Curve Adjustment Paths. Assume the United States has the following import/export volumes and prices. It undertakes a major "devaluation" of the dollar, say 18% on average against all major trading partner currencies. What is the pre-devaluation and post-devaluation trade balance? Initial spot exchange rate, $/fc Price of exports, dollars ($) Price of imports, foreign currency (fc) Quantity of exports, units Quantity of imports, units Percentage devaluation of the dollar 1.95 21.6100 11.4200 100 120 18.00
Trade Deficits and J-Curve Adjustment Paths. Assume the United States has the following import/export volumes and prices. It undertakes a major "devaluation" of the dollar, say 18% on average against all major trading partner currencies. What is the pre-devaluation and post-devaluation trade balance? Initial spot exchange rate, $/fc Price of exports, dollars ($) Price of imports, foreign currency (fc) Quantity of exports, units Quantity of imports, units Percentage devaluation of the dollar 1.95 21.6100 11.4200 100 120 18.00
Chapter4: Exchange Rate Determination
Section: Chapter Questions
Problem 10QA
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Transcribed Image Text:Trade Deficits and J-Curve Adjustment Paths. Assume the United States has the following import/export
volumes and prices. It undertakes a major "devaluation" of the dollar, say 18% on average against all major trading
partner currencies. What is the pre-devaluation and post-devaluation trade balance?
Initial spot exchange rate, $/fc
Price of exports, dollars ($)
Price of imports, foreign currency (fc)
Quantity of exports, units
Quantity of imports, units
Percentage devaluation of the dollar
What is the pre-devaluation trade balance?
The revenues from exports are $
1.95
21.6100
11.4200
100
120
18.00
(Round to the nearest cent.)
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