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A graph of net exports has a negative slope because net exports are a decreasing function...
The net export function illustrates that:A) net exports are a positive function of domestic income....
The net export function illustrates that:A) net exports are a positive function of domestic income.B) net exports are independent of domestic income.C) net exports are a negative function of domestic income.D) imports are independent of domestic income.E) exports are independent of foreign income. Suppose the marginal propensity to import for country A is 0.4. Calculate the change in total value of imports of the country if national income increases by $100,000.A) $16,000B) $20,000C) $60,000D) $40,000E) $25,000 An MPI of 0.4 indicates that...
What happens to the real exchange rate and net exports in each of the following cases?...
What happens to the real exchange rate and net exports in each of the following cases? a. The world interest rate rises (r*) b. expansionary fiscal policy at home i.e. domestic output rises c. Foreign demand for domestic goods falls as result of contraction fiscal policy at abroad d. Import restrictions i.e. quota or tariffs on foreign goods e. The domestic prices rise more than foreign prices f. nominal exchange rate e falls
4. In 2008, Canada had net exports of $44.9 billion and sold $488.7 billion of goods...
4. In 2008, Canada had net exports of $44.9 billion and sold $488.7 billion of goods and services abroad. Canada had A. $44.9 billion of exports and $443.8 billion of imports. B. $533.6 billion of exports and $488.7 billion of imports. C. $533.6 billion of imports and $488.7 billion of exports. D. $488.7 billion of imports and $443.8 billion of exports. E. $443.8 billion of imports and $488.7 billion of exports. 5. Which of the following factors affects a country's...
Problem 25-09 (algo) An economy with zero net exports is described below: C = 30 +...
Problem 25-09 (algo) An economy with zero net exports is described below: C = 30 + 0.9 (Y-T) P = 100 G = 150 NX = 0 T = 180 The multiplier in this economy is 10. a. Find short-run equilibrium output. Instructions: Enter your responses as whole numbers. Short-run equilibrium output: b. Economic recovery abroad increases the demand for the country's exports; as a result, NX rises to 25. Short-run equilibrium output (Click to select) to . C. Assume...
1. “The U.S. trade deficit increased in February, as net exports fell victim to a strong...
1. “The U.S. trade deficit increased in February, as net exports fell victim to a strong U.S. dollar and continued economic weakness abroad. Foreign trade once again is proving to be a drag on overall U.S. economic growth, though domestic demand still appears strong.” The Wall Street Journal. What monetary policy action could be used to raise U.S. net exports? Explain how this change in interest rates would affect the value of the U.S. dollar, and in turn, both the...
The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A,...
The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the price level is 120, and the quantity of output demanded is $500 billion. Moving up along the aggregate demand curve from point A to point B, the price level rises to 140, and the quantity of output demanded falls to $300 billion. As the price level rises, the purchasing power of households' real wealth will _______ causing the quantity of output demanded to _______...
2. Consider the following short-ru model of an open economy: Y C+I+G+NX = 50 IM = -EY The domesti...
2. Consider the following short-ru model of an open economy: Y C+I+G+NX = 50 IM = -EY The domestic and foreign prices are constant and normalized to one ((p p" 1), and the nominal exchange rate equals the real exchange rate. (a) The policy makers have an output target, YT 200, and a net- export target, NXT = 0' Show how these targets can be achieved using government consumption (G) and the exchange rate (E) as policy instruments (b) Now...
What happens to the real exchange rate and net exports in each of the following cases?...
What happens to the real exchange rate and net exports in each of the following cases? a. Import restrictions i.e. quota or tariffs on foreign goods b. The domestic prices rise more than foreign prices c. nominal exchange rate e falls
apter 6 Name When a firm in another country outsources a function to a US company....
apter 6 Name When a firm in another country outsources a function to a US company. Domestic price of a foreign currency. Exchange rates determined by supply and demand. That part of a country's balance of payments that includes trade, income from investments, and foreign aid. That part of a country's balance of payments that includes investments made in other countries and foreign investments in the domestic country. KEY TERMS ILI ILIIVI D d 1. Having an absolute advantage 2....
Question 22 (15 marks) (a) Explain the difference between the demand for domestic goods and the...
Question 22 (15 marks) (a) Explain the difference between the demand for domestic goods and the domestic demand for goods. Explain why the demand for domestic goods curve (ZZ) has a different shape from the domestic demand curve (DD). (6 marks) (b) Using the open economy goods market diagram, illustrate graphically and explain what effect a decrease in foreign output (Y*) will have on output, exports, imports, and net exports. Clearly label all curves and the initial and new equilibria....
Problem 25-09 (algo) An economy with zero net exports is described below: C = 30 + 0.9 (Y-T) P = 100 G = 150 NX = 0 T = 180 The multiplier in this economy is 10. a. Find short-run equilibrium output. Instructions: Enter your responses as whole numbers. Short-run equilibrium output: b. Economic recovery abroad increases the demand for the country's exports; as a result, NX rises to 25. Short-run equilibrium output (Click to select) to . C. Assume...
2. Consider the following short-ru model of an open economy: Y C+I+G+NX = 50 IM = -EY The domestic and foreign prices are constant and normalized to one ((p p" 1), and the nominal exchange rate equals the real exchange rate. (a) The policy makers have an output target, YT 200, and a net- export target, NXT = 0' Show how these targets can be achieved using government consumption (G) and the exchange rate (E) as policy instruments (b) Now...
apter 6 Name When a firm in another country outsources a function to a US company. Domestic price of a foreign currency. Exchange rates determined by supply and demand. That part of a country's balance of payments that includes trade, income from investments, and foreign aid. That part of a country's balance of payments that includes investments made in other countries and foreign investments in the domestic country. KEY TERMS ILI ILIIVI D d 1. Having an absolute advantage 2....
Question 22 (15 marks) (a) Explain the difference between the demand for domestic goods and the domestic demand for goods. Explain why the demand for domestic goods curve (ZZ) has a different shape from the domestic demand curve (DD). (6 marks) (b) Using the open economy goods market diagram, illustrate graphically and explain what effect a decrease in foreign output (Y*) will have on output, exports, imports, and net exports. Clearly label all curves and the initial and new equilibria....
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