Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 29, Problem 3P
To determine
(a)
To explain:
The way given situation will impact the US trade balance.
To determine
(b)
To explain:
The way given situation will impact the US trade balance.
To determine
(c)
To explain:
The way given situation will impact the US trade balance.
To determine
(d)
To explain:
The way given situation will impact the US trade balance.
To determine
(e)
To explain:
The way given situation will impact the US trade balance.
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After reading the article, Amadeo, K. & Boyle. M (May 18th, 2021). International trade: Pros, cons, and effect on the economy. the balance, provide an advantage and a disadvantage of international trade. From the article and in your opinion, how do these impact the economy?
https://www.thebalancemoney.com/international-trade-pros-cons-effect-on-economy-3305579
Q2-8
The simple Marshall-Lerner condition would suggest that one of the following cases would produce a worsening of the trade balance if the country's currency depreciated. Which one?(The negative sign on elasticities is being ignored; also, assume that trade is initially balanced.)
Select one:
a. elasticity of demand for exports = 0.8; elasticity of demand for imports = 0.5
b. elasticity of demand for exports = 0.4; elasticity of demand for imports = 0.6
c. demand curve for exports is vertical; demand curve for imports is horizontal
d. elasticity of demand for exports = 0.8; elasticity of demand for imports = 0.1
You have just been hired by the U.S. government to analyze the following scenario. Suppose the U.S. agricultural industry is concerned about the level of fruit and vegetable imports to the United States, a practice that hurts domestic producers. Lobbyists claim that implementing a quota on imports would shrink the size of the trade deficit. The following exercise will help you to analyze this claim.
The following graph shows the demand and supply of U.S. dollars in a model of the foreign-currency exchange market.
Given this change, the dollar (appreciate, depreciate) .
Fill in the following table with the effect of a quota on the following items:
Supply of Loanable Funds
Real Interest Rate
Domestic Investment
Net Exports
in crease, decrease, or no change
increase, decrease or no change
increase decrease or no change
increase , decrease or no change
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