In the summer of 2018, you took a vacation and visited several destinations in France, including the Eiffel Tower where you spent $3,000.  This amount is recorded in the: A) The balance of trade as an import B) Balance of merchandise trade as an import C) The balance of trade as an export   D) Balance of merchandise trade as an export - Incorrect

If a country had exports of $100 billion and imports of $300 billion, they would be considered a net exporter or importer

You are the economic advisor to the Government of Sweden, a country that is not a member of the European Union but trades quite a bit with EU countries and with whom there is a high degree of capital mobility.  (a) Suppose that the members of the European Union enact a large tax cut financed by a large increase in their deficit. What should happen to exchange rates in Sweden? What should happen to Sweden’s trade balance? Show the effects using appropriately labeled graphs, including that of the foreign exchange market. (b) Suppose instead that the European Central bank increase the money supply. What should happen to exchange rates in Sweden? What should happen to Sweden’s trade balance? Show the effects using appropriately labeled graphs, including that of the foreign exchange market. (c) If you are very interested in keeping the Swedish exchange rate constant at the rate it was before the EU tax cut, what specific policy would you recommend to do this, i.e. to keep your currency from…

A trade deficit occurs when a country: A) Has higher exports than imports B) Has higher imports than exports C) Implements strict import quotas D) Lowers tariffs on all imports