(a) To explain: The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

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Answer 1

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Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 33, Problem 2QFR

To determine

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

To determine

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

To determine

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

To determine

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

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International Finance and the Exchange Rate - End of Chapter Problem At a family gathering, one of your cousins says, "We spend so much more on imports than other countries spend on our exports. It isn't fair, and we should raise tariffs on imports to reduce how much we buy from other countries." How might you explain to your cousin that current account deficits aren't necessarily a sign of economic troubles to come? Our current account deficits mean we obtain cheaper goods than we could otherwise. Most economists agree that an unequal bilateral trade balance is nothing to worry about. Contrary to common belief, the current account deficit does not suggest that we are living beyond our means. The flip side of the current account deficit is a financial account surplus, which could enhance future growth if the foreign spending it entails is directed toward high-quality investments.

United States currently runs a significant trade deficit with the rest of the world. Research an academic journal article regarding some of our trade balances with specific countries and share what you find. For example, with whom do we run the largest deficits, with whom do we have surpluses, etc.? Do you think it is a problem if we run a trade deficit? Why or why not? In answering, keep in mind what impact a trade deficit has on other parts of our balance of payments.

A government uses an expenditure-reducing measure to correct a balance of payments current account deficit. In the short term, what effect would this measure have on consumer expenditure and net exports? Pick a,b,c, or d A) consumer expenditure: increase & net exports: decrease B) consumer expenditure: decrease & net exports: decrease C) consumer expenditure: decrease & net exports: increase D) consumer expenditure: increase & net exports: increase

Answer 2

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Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 33, Problem 2QFR

To determine

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

To determine

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

To determine

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

To determine

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

Expert Solution & Answer

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Answer 3

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Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 33, Problem 2QFR

To determine

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

To determine

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

To determine

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

To determine

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Chapter 33, Problem 2QFR

To determine

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

To determine

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

To determine

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

To determine

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

Expert Solution & Answer

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Answer 5

Chapter 33, Problem 2QFR

To determine

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

To determine

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

To determine

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

To determine

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

Answer 6

Chapter 33, Problem 2QFR

To determine

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

Answer 7

Chapter 33, Problem 2QFR

To determine

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

Answer 8

To determine

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

Answer 9

To determine

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

Answer 10

To determine

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

Answer 11

To determine

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

Answer 12

To determine

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

Answer 13

To determine

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

Answer 14

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Answer 17

Ch. 33 - Prob. 1QFR Ch. 33 - Prob. 2QFR Ch. 33 - Prob. 3QFR Ch. 33 - Prob. 4QFR Ch. 33 - Prob. 5QFR Ch. 33 - Prob. 6QFR Ch. 33 - Prob. 7QFR

(a) To explain: The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

Solution Summary: The author explains the impact on current account deficit due to the slow economic growth in the US.

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.

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Chapter 33 Solutions

(a) To explain: The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

Solution Summary: The author explains the impact on current account deficit due to the slow economic growth in the US.

(a) To explain: The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

(b) To explain: The impact on current account deficit due to increase in personal savings rate.

(c) To explain: The impact on current account deficit when there is a decrease in the federal budget deficits.

(d) To explain: The impact on current account deficit when there is increase in foreign rates of return.

Want to see the full answer?

Chapter 33 Solutions

(a)

To explain:

The impact on current account deficit due to the slow economic growth in U.S. than rest of the countries.

(b)

To explain:

The impact on current account deficit due to increase in personal savings rate.

(c)

To explain:

The impact on current account deficit when there is a decrease in the federal budget deficits.

(d)

To explain:

The impact on current account deficit when there is increase in foreign rates of return.