MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Question
Chapter 20, Problem 2TY
To determine
To Explain: The reason for the change in the fundamental equation.
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The United States typically has a balance-of-trade
deficit in its trade with which two countries?
North Korea
Japan
China
Iran
Turkey has run a trade deficit for almost every year during the past few decades. Which of the following is the main factor leading to this situation?
a.The Turkish lira is overvalued against foreign currencies.
b.International demand for Turkish goods and services is low.
c.Domestic demand for foreign goods and services is high.
d.National saving in Turkey is low relative to domestic investment.
Assuming that a country has a trade deficit of $50 billion, which of the following is true:
A. The country's exports are $120 billion and its imports are $180 billion
B. The country's exports are $100 billion and its exports are $150 billion
c. The country's imports are $120 billion and its exports are $180 billion
d. The country's exports are $150 billion and its imports are $100
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- Suppose that during 2004, country A had exports of goods of $50, imports of goods of $60, exports of servicces plus investment income receipts from abroad of $36, and imports of services plus the sending of payments of investment income abroad of $30. In addition, during 2004, country A made $15 of unilateral transfers abroad and received no unilateral transfers from abroad. Given this information, country A's "balance on current account" in 2004 was a. a $19 deficit b. a $10 deficit c. a $4 deficit d. a $6 surplusarrow_forwardAssume that in 2010, a country had a GDP of $500$500 billion, a budget deficit of $6$6 billion, and a trade deficit of $10$10 billion. In five years, the budget deficit became $4.0$4.0 billion, and the trade deficit as a percentage of GDP changed by 0.70.7 percentage point(s). GDP remained unchanged.Calculate the dollar value of the trade deficit in 2015.arrow_forwardWhat impact will an appreciation of the dollar have on the relative price of foreign goods to Americans, and the relative price of American made products to foreigners? What will likely happen to America's trade deficit?arrow_forward
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