Homework Answers
Option (a).
In presence of trade deficit, an increase in imports will increase trade deficit further, so current account deficit will increase. Since current account deficit equals capital account surplus, higher current account deficit will increase capital account surplus.
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Suppose the United States initially has a trade deficit. Then U.S. firms increase their imports from...
Assume that the world consists only of the United States and Germany and that trade between...
Assume that the world consists only of the United States and Germany and that trade between them is balanced, so that neither country runs a trade deficit or surplus. If the euro falls in value relative to the U.S. dollar, with all else remaining unchanged, what will occur? U.S. exports to Germany will ______, and U.S. imports from Germany will ______. These changes in trade will cause net exports (NX) in the United States to ______. The United States would...
Complete the sentences. Assume that the world consists only of the United States and Germany and...
Complete the sentences. Assume that the world consists only of the United States and Germany and that trade between them is balanced, so that neither runs a trade deficit or surplus. If the euro falls in value relative to the U.S. dollar, with all else remaining unchanged, what will occur? U.S. exports increase to Germany will and decrease imports from Germany will increase deficit less than These changes in trade will decrease Сашка Answer Bank ng ex not change outflow...
Suppose that the United States currently both produces kumquats and imports them. The U.S. government then...
Suppose that the United States currently both produces kumquats and imports them. The U.S. government then decides to restrict international trade in kumquats by imposing a quota that allows imports of only six million pounds of kumquats into the United States each year. The figure to the right shows the results of imposing the quota. Fill in the following table (enter all numeric responses rounded to the nearest penny for prices and as whole numbers for quantities). .Su.s With Without...
How do each of the following transactions affect: (1) the trade surplus or deficit for the United States AND (2) cap...
How do each of the following transactions affect: (1) the trade surplus or deficit for the United States AND (2) capital inflows or outflows for the United States a. A U.S. exporter sells software to Israel. She uses the Israeli shekels received to buy stock in an Israeli company The U.S. export creates a trade surplus and the purchase of Israeli stock creates a capital outflow NX (trade balance) 0 Kl (net capital inflows) 0 NX+ K 0. b. A...
Suppose that the united states currently imports 1.0 million pairs of shoes from china at $20 eac...
Suppose that the united states currently imports 1.0 million pairs of shoes from china at $20 each. With a 50% tariff, this made the consumer price in the United States $30.The price of shoes in Mexico is $25 suppose that as a result of free trade agreement with Mexico, the United states imports 1.2 million pairs of shoes from Mexico and none from china. What are the gains and losses to U.S consumers, U.S producers, and U.S government and the...
The following table shows the approximate value of exports and imports for the United States from 2006 through 2010.
1. Imports, exports, and the trade balance The following table shows the approximate value of exports and imports for the United States from 2006 through 2010. Complete the table by calculating the surplus or deficit both in absolute (dollar) terms and as a percentage of GDP. If necessary, round your answers to the nearest hundredth. Between 2007 and 2008, the _______ , _______ in dollar terms and _______ as a percentage of GDP.
6. The balance of payments is ..-(A) negative when the nation runs a trade deficit. (B)...
6. The balance of payments is ..-(A) negative when the nation runs a trade deficit. (B) positive when the nation runs a trade surplus. (C) negative when the country is a borrower in the international apital market. (D) positive when the country is a lender in the international capital market. (E) always equal to zero. 7. If the U.S. dollar increases in value relative to the British pound, (A) U.S. wheat will become cheaper in England. (3) British bicycles will...
R' Question #2 a. Suppose that a candidate running for president of the United states proposed a ...
r' Question #2 a. Suppose that a candidate running for president of the United states proposed a 20 percent tarifen tax) on imports to the United States from major trading partners like Chine, Japan, Canada, Mexico graphically the impact of this balance or net exports. Assume that the country starts from a position of balanced trade, i.e. exports equal imports. Be sure to label: i. the axes; ii. the curves; ii the initial equilibrium values; iv, the direction the curves...
Suppose that with free trade, the cost to the United States of importing a keyboard from...
Suppose that with free trade, the cost to the United States of importing a keyboard from Mexico is $13.00, and the cost of importing a keyboard from China is $11.00. A keyboard produced in the United States costs $18.00. Suppose further that before NAFTA, the United States maintained a tariff of all keyboard Imports. Then, under NAFTA, all tariffs between Mexico and the United States are removed, while the tariff ina remains in effect. Assume that the tariff does not...
1) The United States sugar industry has enjoyed trade protection for several years. As a result,...
1) The United States sugar industry has enjoyed trade protection for several years. As a result, sugar prices in the U.S. are higher than the average world price. Suppose that the domestic demand and domestic supply for sugar are as provided in the table below (assume continuous, linear domestic demand and supply curves which include the following data points for sugar): | Price ($ per Quantity Demanded Domestically Quantity Supplied Domestically pound) (Millions of Pounds per Year) (Millions of Pounds...
Complete the sentences. Assume that the world consists only of the United States and Germany and that trade between them is balanced, so that neither runs a trade deficit or surplus. If the euro falls in value relative to the U.S. dollar, with all else remaining unchanged, what will occur? U.S. exports increase to Germany will and decrease imports from Germany will increase deficit less than These changes in trade will decrease Сашка Answer Bank ng ex not change outflow...
Suppose that the United States currently both produces kumquats and imports them. The U.S. government then decides to restrict international trade in kumquats by imposing a quota that allows imports of only six million pounds of kumquats into the United States each year. The figure to the right shows the results of imposing the quota. Fill in the following table (enter all numeric responses rounded to the nearest penny for prices and as whole numbers for quantities). .Su.s With Without...
How do each of the following transactions affect: (1) the trade surplus or deficit for the United States AND (2) capital inflows or outflows for the United States a. A U.S. exporter sells software to Israel. She uses the Israeli shekels received to buy stock in an Israeli company The U.S. export creates a trade surplus and the purchase of Israeli stock creates a capital outflow NX (trade balance) 0 Kl (net capital inflows) 0 NX+ K 0. b. A...
6. The balance of payments is ..-(A) negative when the nation runs a trade deficit. (B) positive when the nation runs a trade surplus. (C) negative when the country is a borrower in the international apital market. (D) positive when the country is a lender in the international capital market. (E) always equal to zero. 7. If the U.S. dollar increases in value relative to the British pound, (A) U.S. wheat will become cheaper in England. (3) British bicycles will...
r' Question #2 a. Suppose that a candidate running for president of the United states proposed a 20 percent tarifen tax) on imports to the United States from major trading partners like Chine, Japan, Canada, Mexico graphically the impact of this balance or net exports. Assume that the country starts from a position of balanced trade, i.e. exports equal imports. Be sure to label: i. the axes; ii. the curves; ii the initial equilibrium values; iv, the direction the curves...
Suppose that with free trade, the cost to the United States of importing a keyboard from Mexico is $13.00, and the cost of importing a keyboard from China is $11.00. A keyboard produced in the United States costs $18.00. Suppose further that before NAFTA, the United States maintained a tariff of all keyboard Imports. Then, under NAFTA, all tariffs between Mexico and the United States are removed, while the tariff ina remains in effect. Assume that the tariff does not...
1) The United States sugar industry has enjoyed trade protection for several years. As a result, sugar prices in the U.S. are higher than the average world price. Suppose that the domestic demand and domestic supply for sugar are as provided in the table below (assume continuous, linear domestic demand and supply curves which include the following data points for sugar): | Price ($ per Quantity Demanded Domestically Quantity Supplied Domestically pound) (Millions of Pounds per Year) (Millions of Pounds...
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