Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 36, Problem 6DQ
To determine
Effect of tax cut in US
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Chapter 36 Solutions
Economics: Principles & Policy
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- In recent decades, has the U.S. trade balance usually been in deficit, surplus, or balanced?arrow_forwardWhen is a trade deficit likely to work out well for an economy? When is it likely to work out poorly?arrow_forwardOver the past four years, the US trade deficit has increased to $576.9 billion. Based on your understanding of what it means to have a trade deficit, is this number too large? Why or why not? What are the implications for the short-term and long-term US economy?arrow_forward
- What are some reasons to think that America is obligated to help poor countries? What are some reasons to think that America is not obligated to help poor countries? Is foreign aid worsening our budget deficit?arrow_forwardGenerally, how does the standard of living in the United States today compare to the standard of living in other countries? To the standard of living in the United States a century ago?The Bureau of Economic Analysis, or BEA, is a government agency collecting various U.S. economy statistics. From the BEA’s website, find data for the most recent year available on U.S. exports and imports of goods and services. Is the United States running a trade surplus or deficit? Calculate the ratio of the surplus or deficit to U.S. exports.There are many people out there providing opinions on the economy. How can differences of opinion about economic policy recommendations be resolved?arrow_forwardWhat is a foreign trade deficit or surplus? How does this affectinterest rates?arrow_forward
- The balance of trade shows a deficit of $200 million. With the value of exports being $300 million, what should be the value of imports?arrow_forwardHow big is the trade deficit relative to overall GDP?arrow_forwardIn an economy open to trade, must a government budget deficit always be accompanied by an external sector deficit? Why or why not? Could a government budget deficit lead to a government budget surplus?arrow_forward
- Find the revenue deficit???arrow_forwardSketch a diagram of how a budget deficit causes a trade deficit. (Hint: Begin with what will happen to the exchange rate when foreigners demand more U.S. government debt.)arrow_forwardIf a country has a trade deficit, what will occur?Choose one answer. Imports will exceed exports. Exports will exceed imports. Imports and exports will be equal. d. Currency will be devaluedarrow_forward
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