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Business Economics Economics: Principles & Policy

Currency depreciation leads to an improvement in a country’s trade balance.

Currency depreciation leads to an improvement in a country’s trade balance.

Solution Summary: The author explains that currency depreciation leads to an improvement in a country's trade balance.

Economics: Principles & Policy

Economics: Principles & Policy

14th Edition

ISBN: 9781337696326

Author: William J. Baumol; Alan S. Blinder; John L. Solow

Publisher: Cengage Learning

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Question

Definition Definition Difference in value of a country's net exports and net imports for goods and services in a given period. A positive balance of trade is called a surplus and coincides with more net cash inflows into a country; a negative balance of trade deficit is a deficit and results in net cash outflows. A balance of trade surplus or deficit doesn't necessarily indicate a positive or negative situation for a country.

Chapter 36, Problem 3DQ

To determine

Currency depreciation leads to an improvement in a country’s trade balance.

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Chapter 36, Problem 2DQ

Chapter 36, Problem 4DQ

Students have asked these similar questions

How does a depreciation or devaluation of a nation’s currency operate to eliminate or reduce a deficit in its current account or balance of payments?

Explain why you agree or disagree with the following statements: A country that grows faster than its major trading partners can expect the international value of its currency to depreciate.

Chapter 36 Solutions

Economics: Principles & Policy

Ch. 36 - Prob. 1DQ Ch. 36 - Prob. 2DQ Ch. 36 - Prob. 3DQ Ch. 36 - Prob. 4DQ Ch. 36 - Prob. 5DQ Ch. 36 - Prob. 6DQ Ch. 36 - Prob. 7DQ Ch. 36 - Prob. 1TY Ch. 36 - Prob. 2TY Ch. 36 - Prob. 3TY

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