Question

Questions 1. Do you think the efforts of Brazil's government to keep the economy growing will be successful? Why or why not? 2. What downsides might Brazil experience by implementing quotas, tariffs, and measures to devalue its currency?
please answer those two questions

Answer 1

Brazil is going through a tough patch, but in the long term, they'll be all right. Brazil is now an upper-middle income nation with more than $2 trillion in GDP. Their GDP is about $15,000 per capita, which is higher than the world average and about half that of Portugal or Poland. Their life expectancy is 74, which is also above the world average and just a few years behind the United States. For the last few years, Brazil has been in a recession; it actually seems to be a stagflation recession similar to what the US went through in the 1970s. They've had inflation rates around 10%, which is high, but by no means unbearable. Their unemployment is around 8%, which is, again, high, but not catastrophic. Their fiscal deficit is about 10% of GDP, another moderately bad sign. All they really need to do is cut each of those numbers in half and they'll be just fine. (The people calling for them to achieve fiscal surplus frankly don't seem to grasp how fiscal policy works. All they really need to do is cut each of those numbers in half and they'll be just fine. (The people calling for them to achieve fiscal surplus frankly don't seem to grasp how fiscal policy works. Brazil has been in recession for the last few years; it currently tends to be a stagflation recession close to what the US experienced in the 1970's. They had inflation rates of about 10 per cent, which is high but not unbearable at all. Their unemployment is around 8%, which is, again, high, but not devastating. Approximately 10 percent of GDP is their fiscal deficit, another relatively poor indicator.

The Brazilian government officially extended its tariff quota on U.S. ethanol imports for 90 days as of Monday, after the Brazilians briefly applied a tariff of 20 per cent on all U.S. imports on Sept. 1. Officials from the ethanol industry have been pressuring the administration of President Donald Trump to normalise ethanol trade ties with Brazil. Trump at a press conference on 10 August Trump said he was willing to consider implementing tariffs on Brazilian imports.

One year ago, Brazil raised the tariff rate quota from about 159 million to about 198 million gallons. The quota essentially regulates the amount of U.S. ethanol allowed into Brazil before the tariff kicks in.

Below are the three key point to prevent the devaluation of Brazilian's currency.

1.To increase exports

Goods from one nation have to compete on a global market with those from all other nations.

In America, car manufacturers must compete with car manufacturers in Europe and Japan. If the euro's value falls relative to the dollar, the price of cars sold in dollars by European manufacturers in America would potentially be less costly than before.

2. Shrinking Trade Deficits

Exports will grow, and imports will fall as exports become cheaper and imports become more expensive.

This favours an improved balance of payments as exports rise and imports decrease and trade deficits decline.

With the United States and several other nations running chronic imbalances year after year, large deficits are not uncommon today.

3. Reducing Burdens of Sovereign Debt

If it has a lot of government- issued sovereign debt to service on a regular basis, a government will be encouraged to promote a weak currency policy A weakened currency makes these payments effectively less costly over time if debt payments are fixed.