Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 16, Problem 9CQ
To determine
Explain how the money of stable value influences the volume of trade.
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What factors determine a country’s level of trade? What is the difference between the balance of trade and level of trade?
At one time, it was believed that the way for a nation to prosper was to export as much as possible while importing as little as possible. More money would flow into a country than out of a country. Is this really a sound economic strategy? What is the relationship between exports and imports?
Why has the scale of global trade increased so dramatically since the mid-twentieth century?
How has the nature of global trade changed since the 1960s?
What are some of the advantages of globalization?
Chapter 16 Solutions
Macroeconomics: Private and Public Choice (MindTap Course List)
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- Will nations that are more involved in foreign trade tend to have higher trade imbalances, lower trade imbalances, or is the pattern unpredictable?arrow_forwardYou just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?arrow_forwardIf you observed a country with a rapidly growing trade surplus over a period of a year or so, would you be more likely to believe that the countrys economy was in a period of recession or of rapid growth? Explain.arrow_forward
- Who gains and who loses from trade?arrow_forwardIf trade increases world GDP by 1 per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint To answer this question, here are steps you may want to consider. Go to the World Development Indicators (online) published by the World Bank. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lankas GDP.arrow_forward
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