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esent discounted value of the sum of trade deficits and surpl

esent discounted value of the sum of trade deficits and surpl

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 23 In 2021, the U.S. is running a trade deficit of $500 billion. The expected surplus in 2023 is $510 billion. Assuming the interest rate is a constant 2%, calculate the trade balance in 2022 such that the present discounted value of the sum of trade deficits and surpluses (from 2021 to 2023) is zero. Use a spreadsheet for your calculations and round your answer to the nearest $ billion. Note: Enter a trade surplus is a positive number and the trade deficit as a negative number.
Transcribed Image Text:Question 23 In 2021, the U.S. is running a trade deficit of $500 billion. The expected surplus in 2023 is $510 billion. Assuming the interest rate is a constant 2%, calculate the trade balance in 2022 such that the present discounted value of the sum of trade deficits and surpluses (from 2021 to 2023) is zero. Use a spreadsheet for your calculations and round your answer to the nearest $ billion. Note: Enter a trade surplus is a positive number and the trade deficit as a negative number.
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