Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 23, Problem 10SCQ
Explain the relationship between a current account deficit or surplus and the flow of funds.
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Why is a nation with a current account deficit a borrower at that point in time?
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Which government policy measure would be most likely to reduce a current account deficit and unemployment? Pick a,b,c, or d
A. Decrease in income tax
B. Increase in corporation tax
C.Increase in the rate of interest
D. Devaluation
Chapter 23 Solutions
Principles of Economics 2e
Ch. 23 - If foreign investors buy more U.S. stocks and...Ch. 23 - If the trade deficit of the United States...Ch. 23 - State whether each of the following events...Ch. 23 - In what way does comparing a countrys exports to...Ch. 23 - At one point Canadas GDP was 1,800 billion and its...Ch. 23 - The GDP for the United States is 18,036 billion...Ch. 23 - Why does the trade balance and the current account...Ch. 23 - State whether each of the following events...Ch. 23 - How does the bottom portion of Figure 23.3,...Ch. 23 - Explain the relationship between a current account...
Ch. 23 - Using the national savings and Investment...Ch. 23 - If a country is running a government budget...Ch. 23 - What determines the size of a countrys trade...Ch. 23 - If domestic Investment increases, and there is no...Ch. 23 - Why does a recession cause a trade deficit to...Ch. 23 - Both the United States and global economies are...Ch. 23 - For each of the following, indicate which type of...Ch. 23 - How did large trade deficits hurt the East Asian...Ch. 23 - Describe a scenario in which a trade surplus...Ch. 23 - The United States exports 14 of GDP while Germany...Ch. 23 - Explain briefly whether each of the following...Ch. 23 - If imports exceed exports, is it a trade deficit...Ch. 23 - What is included in the current account balance?Ch. 23 - In recent decades, has the U.S. trade balance...Ch. 23 - Does a trade surplus mean an overall inflow of...Ch. 23 - What are the two main sides of the national...Ch. 23 - What are the main components of the national...Ch. 23 - When is a trade deficit likely to work out well...Ch. 23 - Does a trade surplus help to guarantee strong...Ch. 23 - What three factors will determine whether a nation...Ch. 23 - What is the difference between trade deficits and...Ch. 23 - Occasionally, a government official will argue...Ch. 23 - A government official announces a new policy. The...Ch. 23 - If a country is a big exporter, is it more exposed...Ch. 23 - If countries reduced trade barriers, would the...Ch. 23 - Is it better for your country to be an...Ch. 23 - Many think that the size of a trade deficit is due...Ch. 23 - If you observed a country with a rapidly growing...Ch. 23 - Occasionally, a government official will argue...Ch. 23 - What is more important, a countrys current account...Ch. 23 - Will nations that are more involved in foreign...Ch. 23 - Some economists warn that the persistent trade...Ch. 23 - In 2001, the United Kingdoms economy exported...Ch. 23 - Imagine that the U.S. economy finds itself in the...Ch. 23 - Table 23.7 provides some hypothetical data on...Ch. 23 - Imagine that the economy of Germany finds itself...
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Similar questions
- The GDP for the United States is 18,036 billion and its current account balance is 484 billion. What percent of GDP is the current account balance?arrow_forwardAre current account deficits necessarily undesirable? Provide a brief justification.arrow_forwardIn the balance of payments, what does the net capital flow indicate, and how will a current account deficit affects it?arrow_forward
- 5 List the types of policies that can lead to a current account deficitarrow_forwardJapan has run large current account surpluses for much of the past two decades, yet no one ever asks if these surpluses are sustainable. Why are surpluses treated differently than deficits?arrow_forwardWhat is more important, a country’s current account balance or GDP growth? Why?arrow_forward
- Discuss the following statement: “It’s true that running a current account deficit for a developing country is a bad thing”arrow_forwardA government decides to introduce an expenditure-switching measure to reduce a balance of trade deficit. Which of the following is an expenditure-switching measure? Pick a,b,c, or d A. A government subsidy to domestic producers B. An increase in income tax C. An increase in the rate of interest D.A decrease in state benefitsarrow_forwarddiscuss the common view that current account deficits are undesirable in a developing countryarrow_forward
- Very short answer question What is meant by deficit in balance of payments?arrow_forwardSuppose that GDP is equal to 1,000, national saving is equal to 200, the current account deficit is equal to 100, and the government budget deficit is equal to 50. Private savings must equal ( )arrow_forwardWhy could a current account deficit stimulate an economy? List at least two reasons and explain with an example for each.arrow_forward
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