Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 8, Problem 7QP
To determine
Explain the import and export if dollar
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How are the following events likely to influence the level of American net exports?
GDP grows faster in the United States than in the rest of the world.
The inflation rate falls in the United States, but not in the rest of the world.
Because of a worldwide increase in fuel prices, consumers everywhere become more interested in small, fuel-efficient cars, most of which are built abroad.
How are the following events likely to influence the level of American net exports?
1) Consumers in Europe become more prosperous, while the United States is mired in a recession.
2) The United States encounters a period of unexpectedly high inflation.
Assuming the economy is operating below its potential output, what is the impact of an increase in net exports on real GDP ? Why is it difficult, if not impossible, for a country to boost its net exports by increasing its tariffs during a global recession?
Chapter 8 Solutions
Macroeconomics
Ch. 8.2 - Prob. 1STCh. 8.2 - Prob. 2STCh. 8.2 - Prob. 3STCh. 8.3 - Prob. 1STCh. 8.3 - Prob. 2STCh. 8.3 - Prob. 3STCh. 8.5 - Prob. 1STCh. 8.5 - Prob. 2STCh. 8 - Prob. 1QPCh. 8 - Prob. 2QP
Ch. 8 - Prob. 3QPCh. 8 - Prob. 4QPCh. 8 - Prob. 5QPCh. 8 - Prob. 6QPCh. 8 - Prob. 7QPCh. 8 - Prob. 8QPCh. 8 - Prob. 9QPCh. 8 - Prob. 10QPCh. 8 - Prob. 11QPCh. 8 - Prob. 12QPCh. 8 - Prob. 13QPCh. 8 - Prob. 14QPCh. 8 - Prob. 15QPCh. 8 - Prob. 16QPCh. 8 - Prob. 17QPCh. 8 - Prob. 18QPCh. 8 - Prob. 19QPCh. 8 - Prob. 20QPCh. 8 - Prob. 21QPCh. 8 - Prob. 1WNGCh. 8 - Prob. 2WNGCh. 8 - Prob. 3WNGCh. 8 - Prob. 4WNGCh. 8 - Prob. 5WNGCh. 8 - Prob. 6WNG
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Similar questions
- If Australia, which imports goods from the United States, went into recession, we should expect that U.S. net exports would fall, making the aggregate demand shift right. fall, making the aggregate demand shift left. rise, making the aggregate demand shift right. rise, making the aggregate demand shift left.arrow_forwardHow does an increase in foreign income affect domestic aggregate expenditures and demand?arrow_forwardHow does an increase in government transfer payments affect aggregate demandarrow_forward
- State whether each of the following transactions is a part of aggregate demand in the United States, and whether it is C, I, G, X, or IM. a. David buys a keyboard synthesizer made in the United States b. A Japanese automaker buys stock in an American auto company c. A Japanese automaker builds an assembly plant in Illinois d. Will buys a compact disc player made in Japan e. Dieter, a German resident, buys frozen chickens that were raised in the United States f. The U.S. government sends an insurance check to Renee, an unemployed keypunch operator.arrow_forwardIf young business professionals in America suddenly decide that driving German-made cars (=produced in Germany) is an important status symbol, net exports will tend to _____ causing aggregate demand to _____. Group of answer choices fall; rise fall; fall rise; fall rise; risearrow_forwardSuppose exports increase. According to the shares of spending model, what would happen to interest rates, consumption, investment, and net exports in the long run?arrow_forward
- State whether each of the following transactions is a part of aggregate demand in the United States, and whether it is C, I, G, X, or IM. a. Will buys a compact disc player made in Japan b. Dieter, a German resident, buys frozen chickens that were raised in the United States c. The U.S. government sends an insurance check to Renee, an unemployed keypunch operator.arrow_forwardWhat happens to aggregate demand when transfer payments and the taxes to pay them both rise by the same amount?arrow_forwardThe effect that a change in the price level has on a country's exports and imports is called the: Exchange rate effect. Interest rate effect. International effect. Multiplier effect.arrow_forward
- This graph shows an increase in aggregate supply in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve (SRAS) shifts to the right from SRAS1 to SRAS2, causing the quantity of output supplied at a price level of 125 to rise from $250 billion to $350 billion.arrow_forwardWhich of the following is a reason why increases in the price level results in a decline in aggregate expenditure? Price level increases raise real wealth which causes consumption spending and aggregate expenditures to decline. Price level increases cause firms and consumers to hold more money, which raises the interest rate. Higher interest rates lower consumption and planned investment expenditures, which lowers aggregate expenditures. Price level increases in the U.S. relative to other countries, raise net exports, which lowers aggregate expenditures. As the price level rises, government spending falls, which lowers aggregate expenditures.arrow_forward
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