Question:- Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports. b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India. c) Inflation rate in the country has reached 6.73%

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
Section: Chapter Questions
Problem 27CTQ: Suppose a country has an overall balance of trade so that exports of goods and services equal...
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Comment, on the likely outcome with sufficient arguments?


a) Impact on aggregate demand of the economy if imports are greater than exports.

b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.

c) Inflation rate in the country has reached 6.73%.

d) Impact on GDP when, Interest rates have come down in the country

e) Impact on balance of payment, when there is a huge demand of vaccines produced in India in South Africa.

f) Inflation rate in India reaches negative 2% (-2%)

g) The aggregate demand falls short of aggregate supply in the economy

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