Q: 2. Consider the following information about an economy: Private consumption Government saving Taxes…
A:
Q: A relatively small U.S. balance-of-trade deficit is commonly attributed to a strong demand for U.S.…
A: The underlying reason strong demand for IT exports is normally attributed to strong foreign…
Q: The UK company has to make payment to Omani Company in OMR after 60 days for the purchase of crude…
A: A forward contract may be a customizable derivative contract between two parties to shop for or sell…
Q: How could a greater fiscal deficit create a greater trade deficit?
A: Hey, thank you for the question, since there is multiple question posted, according to our policy we…
Q: 3) Consider the following demand for domestic goods curve. First, explain why curve DD is steeper…
A: Domestic demand for goods rises in direct proportion to income. By subtracting the value of imports…
Q: 9. Consider a no-trade-to-free-trade liberalization with a pro-competitive effect and the expected…
A: Since the question you have posted consists of multiple parts, we will answer the first two parts…
Q: Many countries seem to be worried that they have negative trade balances with China. Is such a trade…
A: A trade imbalance happens when a nation's imports surpass its commodities during a given time-frame.…
Q: Question 2: You want to invest your $6000 in a financial asset. In 2020, one-year US bonds pay an…
A: Answers a) Let the investment is made in US bonds Expected return in US bonds=3% Now assume that…
Q: 1- the neo classical economists believe that the export promotion and trade liberalization are…
A: The idea that governments should not regulate private enterprise and that free market forces should…
Q: 2 - What is the other name for the difference between export and import? A) Net exports B) Foreign…
A: Exports are the commodities that are sold to the other countries from the home country while imports…
Q: 6) When United States residents acquire assets abroad, they are in essence A) borrowing money, and…
A: A buyer agrees to buy certain assets and liabilities in an asset purchase. This implies they only…
Q: Why are persistent budget deficits worrisome? - Deficits can lead to private investment spending…
A: Budget deficits occurs when government's expenditure is more than government's revenue. Government…
Q: If planned aggregate expenditures (AE) are $500 billion, consumption (C) is $250 billion, investment…
A: AE = C + I + G + NX where NX = X-M where X is imports and M is imports
Q: “The document showing the income and expenses of the state together is called X.” In his statement,…
A: Marginal Revenue: The additional revenue generated by selling the additional unit of goods and…
Q: 5. Public debt is the borrowing taken by when government revenue is less than spending. a. the…
A: public debt is the amount of borrowing that is made to fill up the gap between revenues and…
Q: IF 4b The US has experienced large and growing current account deficits for more than 20 years,…
A: Expansionary Fiscal policy:- Expansionary fiscal policy is a macroeconomic notion that entails…
Q: 2. An appreciation of the dollar would result in: A) foreign travel for U.S. residents to be more…
A: Ans 2. Currency appreciation refers to the increase in value of one currency relative to another in…
Q: 7. Asian Pacific Crisis. The Asian financial crisis that began in July 1997 wreaked havoc throughout…
A: Meaning of Exchange Rate: The term exchange rate refers to the situation under which a particular…
Q: 0 Question 26 Treasury securities are O bonds sold by the US government to pay for the national…
A: Question 26-
Q: 8. For this question, assume that equilibrium output is determined in the zZ - Y diagram. Further…
A: Balanced trade occurs when Export= Import Where Net export = X - M At the level of full employment…
Q: 1. Which of the following would neutralize and offset the stimulating effect of deficit spending? *…
A: When government increases spending to boost Aggregate demand, the government injections to the…
Q: II. Problem Solving: An economy shows the following features: (All figures are in Php) Consumption…
A: Given Consumption function C = 50+ 0.9(Y-T) ......... (1) Tax revenue: T = 100 Government…
Q: Has the country experienced a balance of payments trade deficit or surplus in the past year? How…
A: For Germany the balance data has been recorded at the 268.526 USD bn in 2020, it would consecutively…
Q: True/False A pro-savings policy by the US would likely reduce the US trade deficit.
A: Trade deficit: It refers to the situation in which the country import exceeds the country’s export.…
Q: . In order to stop the capital flight and avoid further depreciation of rupiah, one of the President…
A: A budget surplus is defined as the period when the income or receipts exceed outlays or…
Q: | Discussion: (d) What is the counterpart to the recent (COVID driven) (d). increase in the federal…
A: As we know COVID has pushed the economy years back and shows how our medical infrastructure was not…
Q: 5. Which of the following is correct? ) Depreciation in value of domestic currency s caused because…
A: According to the given question we can see that Option(d) is the correct answer that it both a…
Q: b- The classical model of comparative advantage shifts over the time as less developed countries…
A: b) Comparative advantage: The theory of Comparative advantage states that a country has benefits not…
Q: 2) As an economist, identify and justify economic and fiscal policy measures that should be taken by…
A: The LM curve shows the positive relationship between interest rate and output. It means the increase…
Q: 59 please quikcly thanks ! If the Bank of Canada raises its target for the overnight interest rate…
A: The rate at which one unit of a currency can be purchased with another currency is referred to as…
Q: In what ways do you think the debt of your country influences the life of ordinary citizens? 2.…
A: Debt refers to an obligation in which the borrower agrees on the money or the agreed sum of money to…
Q: 14. For this question, assume that equilibrium output is determined in the ZZ -Y diagram. Further…
A: Solution Correct option is "E" which is a simultaneous increase in the government spending and…
Q: Suppose the Malaysian net foreign debt is 50 percent of its GDP and foreign assets and liabilities…
A: Gross domestic product (GDP) is a financial proportion of the market worth of the relative multitude…
Q: Do we need it? How can it stimulate the economy? Does it will helps stable the economic or it bring…
A: Stimulate package: It is a package rebate of taxes and provide incentives to stimulate the economy…
1. A pro-savings policy by the US would likely reduce the US
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- When is a trade deficit likely to work out well for an economy? When is it likely to work out poorly?Explain how a shift from a government budget deficit to a budget surplus might affect the exchange rate.4. Analyzing the effects of a trade deficit 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 tariff 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. Shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the tariff. REAL EXCHANGE RATE (Units of foreign currency per dollar) QUANTITY OF DOLLARS Given this change, the dollar Supply Change due to a tariff Demand Fill in the following table with the effect of a tariff on the following items: Demand Supply (?) Demand for Loanable Funds Real Interest Rate National Saving Net…
- 4. Analyzing the effects of a trade deficit 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 tariff 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. Shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the tariff. Supply IN Demand QUANTITY OF DOLLARS REAL EXCHANGE RATE (Units of foreign currency per dollar) Demand Supply ?Question 2After the 9/11 attack on the US, America experienced increasing budget deficits combined with trade deficits. Explain how these two deficits are related. In particular, explain how large budget deficits can cause large trade deficits. US trade deficits with China increased since the 9/11 attacks. The US administrations and the US media often blame this large trade deficit on the Chinese government keeping its currency, the Yuan, artificially low. Use your answer to part A (above) to provide an alternative economic explanation.19 - What is the difference between foreign sales revenues and foreign purchase expenses called? a) budget deficit B) Net exports C) Current Account Deficit D) Export TO) The foreign trade deficit
- Question 2 (a) Distinguish between a government deficit and trade deficit? (b) Would you rather live in a nation with a with a high per capita GDP and a low grow th rate, or in a nation with a low per capita GDP and a high growth rate? (c) Briefly explain the quantity theory of money and how it is related to inflation. (d) Suppose A&K Sound Sys te m is considering building a reco rd studio in Cayman Islands. (i) Assume that A&K Sound System needs borrow money on the bond market. Why would an increase in interest rates affect the decision whether to build the.studio? (ii) If A&K Sound System has enough of its funds to finance the new studio without borrowing, would an increase in interest still affect the decision about whe then to build the studio? Explain your ans wer.28. A devaluation of a country's currency to improve its trade deficit would most likely benefit a producer of: A. export goods that have no close substitutes. B. an export good that represents a relatively small proportion of consumer expenditures. C. luxury goods for export. Hint: A devaluation of the currency will reduce the price of export goods in foreign currency terms. The greatest benefit would be to producers of goods with more elastic demand. Luxury goods tend to have higher elasticity of demand, while goods that have no close substitutes or represent a small proportion of consumer expenditures tend to have low elasticities of demand.16. The macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariffwill reduce South Africa's trade deficit A Because exports will be promoted and imports cannot possibly changeB Because imports will be reduced and exports cannot possibly changeC Only if the tariff has no impact on South Africa's spending or incomeD Only if the tariff leads to increased income in South Africa relative to its spending
- 19. In balance-of-payments accounting, the sale of a foreign production facility by a SA firm is a item in the SA balance of payments; the deposit of funds in a foreign bank account by a SA citizen item in the SA balance of payments. Debit; also is a debit Debit; is a credit Credit, is a debit Credit also is a credit 20. The table below shows a section of the national accounts for a small country in 2018. Answer the question that follows using the information provided in the table. Consumption expenditure Government expenditure 9 800 3 500 Depreciation 500 2 200 Exports Imports Gross capital formation (investment) Primary income payments Primary income receipts 1900 2 500 300 200 The value of Gross Domestic Product (GDP) is: A 16 100 B 19 900 16 600 15 600 A,E3 According to the National Savings and Investment Identity framework, if the US runs a $250 billion trade deficit with another country: 1. private savings from US households and firms also equals $250 billion. 2, inflows of foreign investment from that country also equal $250 billion. 3. tax revenue in the US must increase by $250 billion to pay for the trade deficit. 4. government borrowing must increase by $250 billion to pay for the deficit.1. How could a greater fiscal deficit create a greater trade deficit? 2. What would you do to reduce the deficit? 3. What is the opportunity cost of government spending on servicing the interest on the debt. 4. If the federal government wished to reduce the deficit to any significant degree without raising taxes, where would the reduced spending likely to have to come from? 5. Assume the federal government replaces the federal income tax with a sales tax placed on consumption expenditures. Analyze the impact of this tax change on taxation efficiency and equity.
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
![Brief Principles of Macroeconomics (MindTap Cours…](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
![Brief Principles of Macroeconomics (MindTap Cours…](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)