MICROECONOMICS FOR TODAY (LL)-W/MINDTAP
10th Edition
ISBN: 9781337739115
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 15, Problem 9SQP
To determine
The significance of balance of payments deficit and surplus.
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Discuss this statement : " Because each nation's balance of payments equals zero , it follows that there is actually no significance to a balance of payments deficit or surplus . "
Please define trade surplus, deficit and balance concepts. What currency strategy would you suggest to resolve a trade deficit problem? Please explain your answer with a numerical example.
Define the term TRADE DEFICIT
Chapter 15 Solutions
MICROECONOMICS FOR TODAY (LL)-W/MINDTAP
Ch. 15.4 - Prob. 1GECh. 15.6 - Prob. 1GECh. 15 - Prob. 1SQPCh. 15 - Prob. 2SQPCh. 15 - Prob. 3SQPCh. 15 - Prob. 4SQPCh. 15 - Prob. 5SQPCh. 15 - Prob. 6SQPCh. 15 - Prob. 7SQPCh. 15 - Prob. 8SQP
Ch. 15 - Prob. 9SQPCh. 15 - Prob. 10SQPCh. 15 - Prob. 11SQPCh. 15 - Prob. 1SQCh. 15 - Prob. 2SQCh. 15 - Prob. 3SQCh. 15 - Prob. 4SQCh. 15 - Prob. 5SQCh. 15 - Prob. 6SQCh. 15 - Prob. 7SQCh. 15 - Prob. 8SQCh. 15 - Prob. 9SQCh. 15 - Prob. 10SQCh. 15 - Prob. 11SQCh. 15 - Prob. 12SQCh. 15 - Prob. 13SQCh. 15 - Prob. 14SQCh. 15 - Prob. 15SQCh. 15 - Prob. 16SQCh. 15 - Prob. 17SQCh. 15 - Prob. 18SQCh. 15 - Prob. 19SQCh. 15 - Prob. 20SQ
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- In recent decades, has the U.S. trade balance usually been in deficit, surplus, or balanced?arrow_forwardHow a devaluation may reduce the trade deficit of a country? What condition is required to reduce trade deficit? If this condition is not met , what type of effect may arise?arrow_forwardUnder what conditions will a larger budget deficit cause a trade deficit?arrow_forward
- Suppose that during a recent year for the United States, merchandise imports were $2 trillion, unilateral transfers were a net outflow of $0.2 trillion, service exports were $0.2 trillion, service imports were $0.1 trillion, and merchandise exports were $1.4 trillion. What was the merchandise trade deficit? What was the balance on goods and services? What was the current account balance?arrow_forwardQ.1.2 A deficit on the current account of a country's balance of payments can be financed by a surplus: (1) Of exports over imports; (2) Of net gold exports; (3) On the financial account; (4) On the trade balance.arrow_forwardCompare and contrast changes in the value of the US Dollar on the trade deficitarrow_forward
- 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 tradearrow_forwardExchange Rate Effects on Trade Explain why a stronger dollar could enlarge the U.S. balance-of-trade deficit. Explain why a weaker dollar could affect the U.S. balance-of-trade deficit.arrow_forwardOther things equal, an increase in government purchases of goods and services pushes the trade balance toward______(Surplus/Deficit) and causes the currency to _________ (Appreciate/Depreciate).arrow_forward
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