Suppose that an economy is experiencing large trade deficits. According to pass-through effects, a devaluation would always improve trade balance, when: ο οιο both demand for domestic imports and exports are perfectly inelastic. both supply of domestic imports and exports are perfectly inelastic. the demand for domestic imports is perfectly inelastic and the supply of domestic exports is perfectly inelastic. the supply of domestic imports is perfectly inelastic and the demand for domestic exports is perfectly inelastic.

You have just been hired by the U.S. government to analyze the following scenario. Suppose the U.S. agricultural industry is concerned about the level of fruit and vegetable imports to the United States, a practice that hurts domestic producers. Lobbyists claim that implementing a quota on imports would shrink the size of the trade deficit. The following exercise will help you to analyze this claim. The following graph shows the demand and supply of U.S. dollars in a model of the foreign-currency exchange market.   Given this change, the dollar (appreciate,  depreciate)   .   Fill in the following table with the effect of a quota on the following items: Supply of Loanable Funds Real Interest Rate Domestic Investment Net Exports in crease, decrease, or no change increase, decrease or no change increase decrease or no change  increase , decrease or no change

What will happen to the US trade deficit if the US is in a recession while our trading partners are strong

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

National Saving - Investment = X - IM A country whose National Saving is greater than its Investment will experience a Trade deficit (IM > X) Balanced trade (IM – X) = 0 O Trade surplus (X > IM)

If the U.S. Dollar appreciates, foreigners will find American goods more expensive because they have to spend less for those goods in USD, meaning with higher prices, the number of U.S. goods being exported will likely drop and leads to a reduction in the Gross Domestic Product (GDP). True or False

Define the term TRADE DEFICIT

Question: How is this likely to affect economies that are heavily dependent on oil imports? a) Decrease in inflation b) Increase in their trade deficits c) Increase in their exports d) Decrease in their current account deficits

If domestic investment increases, and there is no change in the amount of private and public saving, what must happen to the size of the trade deficit?

Confused and unsure how to figure out the dollar and percent amounts