The exchange rate between U.S. Dollar and Argentinian Peso is $1 = 125 Pesos. Inflation rate in USA is 8.6% and in Argentinal is 60.2%. In 2021, U.S. goods exports to Argentina were $7.7 billion; imports were $5.1 billion. The U.S. trade surplus with Argentina was $2.6 billion. Explain how the "inflation differential" between the two countries will affect trade. Will USA see an increase in trade surplus?

The exchange rate between U.S. Dollar and Argentinian Peso is $1 = 125 Pesos. Inflation rate in USA is 8.6% and in Argentinal is 60.2%. In 2021, U.S. goods exports to Argentina were $7.7 billion; imports were $5.1 billion. The U.S. trade surplus with Argentina was $2.6 billion. Explain how the "inflation differential" between the two countries will affect trade. Will USA see an increase in trade surplus?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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