Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 13, Problem 4RQ
To determine
J Curve and explanation regarding the behavior of net exports.
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Indicate how each of the following transactions affects U.S. exports, imports, and net exports.
Transaction
Effect On...
U.S. Exports
U.S. Imports
U.S. Net Exports
A British scholar spends a year at Harvard University as a visiting scholar.
Hundreds of people in London queue outside Apple stores to buy new iPhones.
Your uncle buys a new Volvo.
Your aunt buys a novel by a British author from a local bookstore.
A European family goes to Disney World in Florida for vacation.
assess how an increase in import prices and an increase in export prices will affect th sa economy.
Using the data given in Table 1, compute the net exports. Briefly discuss your result and indicate whether there is a trade surplus or a trade deficit in the current account.
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- How would the following transactions affectU.S. exports, imports, and net exports?a. An American art professor spends the summertouring museums in Europe.b. Students in Paris flock to see the latest movie fromHollywood.c. Your uncle buys a new Volvo.d. The student bookstore at Oxford University inEngland sells a copy of this textbook.e. A Canadian citizen shops at a store in northernVermont to avoid Canadian sales taxesarrow_forwardWould each of the following transactions be includedin U.S. net exports or in U.S. net capital outflow?Indicate whether it would represent an increase or adecrease in that variable.a. An American buys a Sony TV.b. An American buys a share of Sony stock.c. The Sony pension fund buys a bond from theU.S. Treasury.d. A worker at a Sony plant in Japan buys someGeorgia peaches from an American farmer.arrow_forwardWhat does this graph show and what is the relationship between real exchange rate and net exports?arrow_forward
- In the equation Y = C + I + G + Nx, sensitize the citizens aboutthe mechanism under which net exports come up.arrow_forwardSuppose you independently contract as a software developer living in the United States, and you just sold a license for your latest program to a Belgian consumer for EUR 5,000. Determine the effects of this transaction on exports, imports, and net exports in the U.S. economy, and enter your results in the following table. If the direction of change is "No change," enter "0" in the Magnitude of Change column. Hint: The magnitude of change should always be positive, regardless of the direction of change. Exports Imports Net Exports Direction of Change Magnitude of Change (Euros) in U.S. net exports is matched by in U.S. net capital Because of the identity equation that relates to net exports, the outflow. Which of the following is an example of how the United States' net capital outflow might be affected in this scenario? Check all that apply. You store the euros in your safety deposit box at home. You purchase EUR 5,000 worth of stock in a Belgian corporation. You buy EUR 5,000 worth of…arrow_forwardWill a direct increase in the price of U.S. goods relative to foreign goods lead to a change in the quantity demanded of Real GDP or to a change in Aggregate Demand? Will a change in the exchange rate that subsequently increases the price of U.S. goods relative to foreign goods lead to a change in the quantity demanded of Real GDP or to a change in Aggregate Demand?arrow_forward
- estion e explain tq Q1. How would the following transactions affect Malaysian exports, imports and net exports? a) AMalaysian professor spends the summertouring museums I Europe. b) Students in Kuala Lumpur flock to see the latest movie from Hollywood, U.S.A c) Your undle buys a new Toyota. # 国 nere to search 直arrow_forwardWhat are the determinants of the trade balance? Briefly explain each determinant.arrow_forwardSuppose a country imposes an import tariff (as a topical real-world example, think about the U.S. under President Donald Trump imposing tariffs on China and a host of other countries). Answer the following questions and 1. What is the effect on imports, exports, and net exports? 2. What is the effect on net foreign investment and the exchange rate?arrow_forward
- How does the fluctuating value of the Euro affect the price of German cars sold in the United States?arrow_forwardWhat happens to the price level and GDP if there is an increase in the exchange rate?arrow_forwarda. Briefly discuss the determinants of imports b. Briefly discuss the determinants of exports c. Explain how a recession in the United States can affect the economies of other nations, including Namibia.arrow_forward
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