Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 29, Problem 27CTQ
Suppose a country has an overall
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If a country's GDP is $10 trillion, its exports are $1 trillion, and its imports are $1.5 trillion, then its trade/GDP ratio is:
What is a trade deficit?
a) When a country exports more goods than it imports
b) When a country's imports and exports are balanced
c) When a country imports more goods than it exports
d) When a country has no international trade
how can countries attain/account for trade equilibria when involved in trade transactions?
Chapter 29 Solutions
Principles of Economics 2e
Ch. 29 - How will a stronger euro affect the following...Ch. 29 - Suppose that political unrest in Egypt leads...Ch. 29 - Suppose U.S. interest rates decline compared to...Ch. 29 - Suppose Argentina gets inflation under control and...Ch. 29 - This chapter has explained that one of the most...Ch. 29 - A booming economy can attract financial capital...Ch. 29 - How would a contractionary monetary policy affect...Ch. 29 - A central bank can allow its currency to fall...Ch. 29 - Is a country for which imports and exports...Ch. 29 - What is the foreign exchange market?
Ch. 29 - Describe some buyers and some sellers in the...Ch. 29 - What is the difference between foreign direct...Ch. 29 - What does it mean to hedge a financial...Ch. 29 - What does it mean to say that a currency...Ch. 29 - Does an expectation of a stronger exchange rate in...Ch. 29 - Does a higher rate of return in a nations economy,...Ch. 29 - Does a higher inflation rate in an economy, other...Ch. 29 - What is the purchasing power parity exchange rate?Ch. 29 - What are some of the reasons a central bank is...Ch. 29 - How can an unexpected fall in exchange rates...Ch. 29 - What is the difference between a floating exchange...Ch. 29 - List some advantages and disadvantages of the...Ch. 29 - Why would a nation dollarize—that is, adopt...Ch. 29 - Can you think of any major disadvantages to...Ch. 29 - If a countrys currency is expected to appreciate...Ch. 29 - Do you think that a country experiencing...Ch. 29 - Suppose a country has an overall balance of trade...Ch. 29 - We learned that changes in exchange rates and the...Ch. 29 - If a developing country needs foreign capital...Ch. 29 - Many developing countries, like Mexico, have...Ch. 29 - What would make a country decide to change from a...Ch. 29 - A British pound cost 2.00 in U.S. dollars in 2008,...
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Similar questions
- Will nations that are more involved in foreign trade tend to have higher trade imbalances, lower trade imbalances, or is the pattern unpredictable?arrow_forwardIt is impossible that a country runs a negative trade balance over decades. True Falsearrow_forwardIf a country's economic data shows that private savings equal $300 million, government spending equals $400 million, taxes equal $300, and the trade surplus equals $100 million, then what does investment equal? (Enter 1 for 1 million)arrow_forward
- The balance of trade refers to the balance of imports and exports. True or falsearrow_forwardOccasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Is this possible?arrow_forwardDefine favourable and non favorable balance of tradearrow_forward
- Last year, a country's GDP was $60 billion, and its level of trade was 15 %. This year, the country's GDP increased by $11 billion, while the value of exports remained unchanged. Calculate the country's level of trade this year. Enter your answer in the box and round to one decimal place if necessary. Answer 2 Points % Keypad Keyboard Shortcutsarrow_forwardSuppose balance of trade is $630 and imports of goods is $115 find the exact value of the exports of good.arrow_forwardSuppose for a given country the demand for imports and exports can be expressed as shown below. Calculate the trade balance if E = 200 where E is the exchange ratio. Be sure to include the sign if you come up with a negative number. IM = 1,200 + 0.05E EX = 700 - 0.08Earrow_forward
- In 2012, the economy of the Utopia exported goods worth $232 billion and services worth another $87 billion. It imported goods worth $225 billion and services worth $56 billion. Receipts of income from abroad were $110 billion while income payments going abroad were $91 billion. Government transfers from the Utopia to the rest of the world were $23 billion, while various Utopia government agencies received payments of $16 billion from the rest of the world. Calculate Utopia’s merchandise trade balance for 2012. Calculate the current account balance for 2012. Explain how you decided whether payments on foreign investment and government transfers counted on the positive or the negative side of the current account balance for Utopia in 2012. sdf sdsarrow_forwardWhy is the bilateral trade balance not necessarily a good measure of the trade relationship between two countries?arrow_forwardWhy does the decline in value of a certain currency cause imports to be expensive and exports cheaper, resulting in cost-push and demand-pull inflation?arrow_forward
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