Macroeconomics Plus MyEconLab with Pearson eText (1-semester access)
Macroeconomics Plus MyEconLab with Pearson eText (1-semester access)
6th Edition
ISBN: 9780134435046
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 18, Problem 18.1.6PA
To determine

The current account surplus is smaller than its trade surplus and balance of financial account of Germany.

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A country with higher nominal interest rates than its trading partners will see its exchange rate depreciate in value relative to the currencies of its trading partners in the long run. Is this statement true or false? Briefly explain why.
Using the data given in Table 1, compute the net exports. Briefly discuss your result and indicate whether there is a trade surplus or a trade deficit in the current account.
What does this graph show and what is the relationship between real exchange rate and net exports?
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