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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Describe a scenario in which a trade surplus benefits an economy and one in which a trade surplus is economy in an economy that performs poorly. What key factor or factors are making the difference in the outcome that results from a trade surplus?

To determine

To discuss: one scenario where the benefits of trade surplus extend to an economy, one scenario where trade surplus occurs in an economy that is not performing good and the factors that lead to the difference in trade surplus is to be determined.

Explanation

If there is a trade surplus that means exports are more than imports in this case the country would not borrow from outside and repayments will be negligible. It will benefit the economy

Suppose the country is in recession. Its domestic demand and economic activity will be down so its exports will be cheaper ...

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