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 18SCQ
How did large
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How 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?
The U.S. trade deficits of the 1980s and 1990s may represent a problem because they will require
a.
lower consumption in the future in order to finance increased investment.
b.
higher consumption in the future in order to increase imports.
c.
higher budget deficits in the future in order to increase the trade surplus.
d.
lower consumption in the future in order to repay interest and principal to foreigners.
Other 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).
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
- Define the term TRADE DEFICITarrow_forwardJust a couple of years after the economic crisis, Spain managed to reduce their trade deficit, was this the result of successful policy taking?arrow_forwardWhat will happen to the US trade deficit if the US is in a recession while our trading partners are strongarrow_forward
- What are the likely reasons of large trade deficit in Pakistan? How would you compare the trade of Pakistan with other countries in the region?arrow_forwardHow can the United States improve trade deficit? Give three solutions.arrow_forwardSuppose a country is experiencing a situation where output is above the full employment level of output and a trade deficit . Further , assume that the policy makers goals are to achieve full employment output and balanced trade . Given this information , what type of exchange rate and / or fiscal policy can be used to achieve simultaneously these two goals ? Explain .arrow_forward
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