Principles of Macroeconomics 2e
2nd Edition
ISBN: 9781947172388
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 10, Problem 18SCQ
How did large
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What have been the major causes of the large U.S. trade deficits in recent years? What are the major benefits and costs associated with trade deficits? Explain: “A trade deficit means that a nation is receiving more goods and services from abroad than it is sending abroad.” How can that be considered to be “unfavorable”?
Over the past four years, the US trade deficit has
increased to $576.9 billion. Based on your
understanding of what it means to have a trade
deficit, is this number too large? Why or why not?
What are the implications for the short-term and
long-term US economy?
Define the term TRADE DEFICIT
Chapter 10 Solutions
Principles of Macroeconomics 2e
Ch. 10 - If foreign investors buy more U.S. stocks and...Ch. 10 - If the trade deficit of the United States...Ch. 10 - State whether each of the following events...Ch. 10 - In what way does comparing a countrys exports to...Ch. 10 - At one point Canadas GDP was 1,800 billion and its...Ch. 10 - The GDP for the United States is 18,036 billion...Ch. 10 - Why does the trade balance and the current account...Ch. 10 - State whether each of the following events...Ch. 10 - How does the bottom portion of Figure 23.3,...Ch. 10 - Explain the relationship between a current account...
Ch. 10 - Using the national savings and Investment...Ch. 10 - If a country is running a government budget...Ch. 10 - What determines the size of a countrys trade...Ch. 10 - If domestic Investment increases, and there is no...Ch. 10 - Why does a recession cause a trade deficit to...Ch. 10 - Both the United States and global economies are...Ch. 10 - For each of the following, indicate which type of...Ch. 10 - How did large trade deficits hurt the East Asian...Ch. 10 - Describe a scenario in which a trade surplus...Ch. 10 - The United States exports 14 of GDP while Germany...Ch. 10 - Explain briefly whether each of the following...Ch. 10 - If imports exceed exports, is it a trade deficit...Ch. 10 - What is included in the current account balance?Ch. 10 - In recent decades, has the U.S. trade balance...Ch. 10 - Does a trade surplus mean an overall inflow of...Ch. 10 - What are the two main sides of the national...Ch. 10 - What are the main components of the national...Ch. 10 - When is a trade deficit likely to work out well...Ch. 10 - Does a trade surplus help to guarantee strong...Ch. 10 - What three factors will determine whether a nation...Ch. 10 - What is the difference between trade deficits and...Ch. 10 - Occasionally, a government official will argue...Ch. 10 - A government official announces a new policy. The...Ch. 10 - If a country is a big exporter, is it more exposed...Ch. 10 - If countries reduced trade barriers, would the...Ch. 10 - Is it better for your country to be an...Ch. 10 - Many think that the size of a trade deficit is due...Ch. 10 - If you observed a country with a rapidly growing...Ch. 10 - Occasionally, a government official will argue...Ch. 10 - What is more important, a countrys current account...Ch. 10 - Will nations that are more involved in foreign...Ch. 10 - Some economists warn that the persistent trade...Ch. 10 - In 2001, the United Kingdoms economy exported...Ch. 10 - Imagine that the U.S. economy finds itself in the...Ch. 10 - Table 23.7 provides some hypothetical data on...Ch. 10 - Imagine that the economy of Germany finds itself...
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Similar questions
- In 2001, 2002, and 2003, Congress passed the series of tax cuts that President Bush had requested. What effect did this policy likely have on the U.S. trade deficit? Why?arrow_forwardHow a devaluation may reduce the trade deficit of a country? What condition is required to reduce trade deficit? If this condition is not met , what type of effect may arise?arrow_forwardWhat is a trade deficit? a) When a country exports more goods than it imports b) When a country's imports and exports are balanced c) When a country imports more goods than it exports d) When a country has no international tradearrow_forward
- Since the 2000s, U.S. trade deficit in goods has increased the most with which of the following countries or regions? Group of answer choices Asian and Pacific rim countries excluding China Europe China Africaarrow_forwardThe macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariff will reduce South Africa's trade deficit.arrow_forwardPeople sometimes worry that American trade with other countries will lead to large U.S. trade deficits and the movement of massive amounts of American capital out of the country. This worry is unfounded because countries cannot a) have both current account and financial account deficits at the same time. b) increase savings at the same time that a trade deficit grows. c) spend more than they earn. d) invest more than they save.arrow_forward
- True or False. Nations with persistent trade deficits often experience slower economic growth.arrow_forwardIf domestic investment increases, and there is no change in the amount of private and public saving, what must happen to the size of the trade deficit?arrow_forwardOther things equal, an increase in government purchases of goods and services pushes the trade balance toward______(Surplus/Deficit) and causes the currency to _________ (Appreciate/Depreciate).arrow_forward
- There are questions related to International Factor Movements and Multinational Enterprises 1. Is there any differences between the theory of multinational enterprises and conventional trade theory? 2. What are the disadvantages of forming joint ventures? There are questions related to The Balance of Payments How do we measure the international investment position of the United States at any point in time? How did the U.S. become a net debtor nation so rapidly? 2. What does a current account deficit mean?arrow_forwardUnder what conditions will a larger budget deficit cause a trade deficit?arrow_forwardJust a couple of years after the economic crisis, Spain managed to reduce their trade deficit, was this the result of successful policy taking?arrow_forward
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