Other things equal, if U.S. disposable income falls, imports will _____ and the current account deficit...
Other things equal, if U.S. disposable income falls, imports will _____ and the current account deficit will _____.
Question 3 options:
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The real exchange rate is defined as the nominal rate times the inflation rate.
Question 4 options:
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Homework Answers
Ques: Option A is correct. As U.S disposable income decreases the ability to import will decrease. Import is the function of US disposable income. Since income has decreased. As a result, import demand is fall. The current account balance is the difference between export demand and import demand. Since import has fallen current account will improve.
Ques: False, the real exchange rate is the rate which is calculated by multiplying price indices of two countries and the nominal exchange rate. It measures the price of foreign goods relative to the price of domestic goods.
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Other things equal, if U.S. disposable income falls, imports
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QUESTION 10 Other things equal, if the Federal Reserve pushes interest rates lower, the U.S. trade...
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