4. Analyzing the effects of a trade deficitSuppose the U.S. government has just hired you to analyze the following scenario. Assume the U.S. automobile industry grows concerned aboutforeign manufacturers exporting fuel-efficient vehicles to the United States, a practice that harms domestic producers. Industry experts daim thatimplementing a quota on imports would reduce the size of the trade deficit. Complete the following exercise in order to help you 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 quota.REAL EXCHANGE RATE (Units of foreign currency per dollar)SupplyQUANTITY OF DOLLARSDemandGiven this change, the dollarFill in the following table with the effect of a quota on the following items:DemandSupplySupply of Loanable Funds Real Interest RateNational SavingNet ExportsChange due to a quota

Understanding the Scenario:The U.S. government is considering implementing a quota on the import of…

Answered: 4. Analyzing the effects of a trade…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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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
After reading the article, Amadeo, K. & Boyle. M (May 18th, 2021). International trade: Pros, cons, and effect on the economy. the balance, provide an advantage and a disadvantage of international trade. From the article and in your opinion, how do these impact the economy? https://www.thebalancemoney.com/international-trade-pros-cons-effect-on-economy-3305579
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Is this right
If the federal government is running a surplus, the surplus becomes a source of funds for the economy private savings will decrease the current account must be negative taxes must fall
A country has 4,000 in domestic savings and firms spent 4,140 on new plant and equipment. The national budget surplus is 60. What must the country’s trade balance be?
3
i will 10 upvotes urgent.
The following graph shows the market for euros in terms of dollars. The market is initially in equilibrium at $2.00 per euro and 8 billion euros. Suppose an economic downturn in the United States leads to a drop in American incomes, causing imports from Europe to decline. On the following graph, show the effect in the market for euros of an economic downturn in the United States that leads to a drop in European incomes. DOLLAR PRICE OF EUROS 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 Supply of Euros Demand for Euros 4 6 8 10 12 QUANTITY OF EUROS (Billions of euros) 14 Under a system of flexible exchange rates, the dollar will per euro. 16 Increase income taxes in the United States. Lower interest rates by way of monetary policy. Demand for Euros Subsidize the production of certain U.S. exports to Europe. Supply of Euros ? Now suppose that the United States maintains a fixed exchange rate of $2.00 per euro. Which of the following U.S. government policies would keep the balance-of-payments…
1. Notice how U.S. imports rose at roughly the same rate asthose of other countries until the 1970s. What accounts forthe acceleration of U.S. imports thereafter? 2. China’s exports rose spectacularly after the 1990s. Germanyincreased its exports in this period dramatically as well. Whatevidence do you see here for increasing competition for theUnited States in a globalizing economy?
An editorial in the Wall Street Journal in 2017 makes the following observation: "When the US has a current-account deficit it has to have a capital-account surplus of the same amount." Source: "How to Think About the Trade Deficit," Wall Street Journal, March 10, 2017. Briefly explain whether you agree with this observation OA Agree, because the United States must have a capital account surplus of the same size B. Disagree, because the observation confuses the capital account with the financial account OC. Disagree, because the current account and the capital account are unrelated OD. Disagree, because the United States must have a capital account deficit of the same size.

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