Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 9, Problem 13CQ
To determine
Identify the factors that determine the exchange rate and explain how net exports be impacted if a nation’s currency appreciates in the foreign exchange market.
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Students have asked these similar questions
Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports?
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.
What is the effect of the following on U.S. net exports?
a) an increase in GDP in Japan
b) an increase in the price of Japanese-made cars with no change in the price of U.S cars.
c) An increase in the value of the U.S dollar relative to the Japanese yen.
Chapter 9 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- Discuss which of the following fall into the categories of consumption, investment, government expenditure and net exports from the Y = C + I + G + NX (X – M) identity, and whether the impact is to increase or decrease GDP.Thomas buys a new housearrow_forwardIf the economy is net importer, what will that do to the aggregate expenditure function and equilibrium level of real GDP?arrow_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
- Is a family a household? Is a household a family? Which sector (Households, Businesses, or International) spends the most? Which sector spends the least? Which sector, because of its volatility, has an importance greater than is warranted by its size? What does it mean if net exports are negative? People sometimes argue that imports should be limited by government policy. Suppose a government quota on the quantity of sugar to be imported to the United States occurs. What is likely to happen to the price of sugar in the United States and in the rest of the world? List the four sectors of the economy along with the type of spending associated with each sector. Order the types of spending in terms of magnitude, and give an example of each kind of spending. Using the interconnection between sectors of the economy, explain the effects of imposing an increase in taxes on the household sector.arrow_forwardHow 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.arrow_forward
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