Price level (GDP deflator, 2009-100) 140- SAS Weak Dollar Helps Shrink Trade Deficit The United States trade deficit narrowed in May as exports climbed to records. Exports of American-made goods and services totaled $157.6 billion in May, a 0.9 percent increase from April. The declining value of the dollar relative to other currencies, especially the euro, is helping to make American exports cheaper and more attractive to foreign buyers. Growth in exports has been one of the few bright spots for the economy, which has been pounded by housing, credit and financial crises. Tax rebates also are energizing shoppers. The New York Times, July 12, 2008 The graph shows the aggregate demand curve and the short-run aggregate supply curve in the U.S. economy. Draw a curve that shows the effect of depreciation of the dollar. Label it. Draw a point at the new short-run macroeconomic equilibrium. 130- 120- 115 110- 100- 90- AD G 80- 9.0 10.0 12.0 13.0 11.0 12.0 14.0 15.0 Real GDP (trillions of 2009 dollars) >>> Draw only the objects specified in the question.

Price level (GDP deflator, 2009-100) 140- SAS Weak Dollar Helps Shrink Trade Deficit The United States trade deficit narrowed in May as exports climbed to records. Exports of American-made goods and services totaled $157.6 billion in May, a 0.9 percent increase from April. The declining value of the dollar relative to other currencies, especially the euro, is helping to make American exports cheaper and more attractive to foreign buyers. Growth in exports has been one of the few bright spots for the economy, which has been pounded by housing, credit and financial crises. Tax rebates also are energizing shoppers. The New York Times, July 12, 2008 The graph shows the aggregate demand curve and the short-run aggregate supply curve in the U.S. economy. Draw a curve that shows the effect of depreciation of the dollar. Label it. Draw a point at the new short-run macroeconomic equilibrium. 130- 120- 115 110- 100- 90- AD G 80- 9.0 10.0 12.0 13.0 11.0 12.0 14.0 15.0 Real GDP (trillions of 2009 dollars) >>> Draw only the objects specified in the question.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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