Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 19, Problem 10CQ
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Economics: Private and Public Choice (MindTap Course List)
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- In recent decades, has the U.S. trade balance usually been in deficit, surplus, or balanced?arrow_forwardHow big is the trade deficit relative to overall GDP?arrow_forwardWhat are some reasons to think that America is obligated to help poor countries? What are some reasons to think that America is not obligated to help poor countries? Is foreign aid worsening our budget deficit?arrow_forward
- Suppose the US goes into a recession where the economy is not growing very quickly (or is actually shrinking) while the economies of our trading partners remain strong. What will most likely happen to our trade deficit? In your answer, explain what will happen to US exports and US imports and why.arrow_forwardIf an economy has a widening trade deficit, which of the following monetary policy option will worsen the external balance the most? a) Easing monetary policy by selling bondsb) Tightening monetary policy by buying bondsc) Easing monetary policy by cutting key interest rated) Tightening monetary policy by raising key interest ratearrow_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
- If 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_forwardDuring the Great Recession there was a large drop in the US trade deficit. There was also a large increase in the US government budget deficit. Are these two facts related? What else must be going on to have a falling trade deficit and a growing government budget deficit at the same time?arrow_forwardIn an economy open to trade, must a government budget deficit always be accompanied by an external sector deficit? Why or why not? Could a government budget deficit lead to a government budget surplus?arrow_forward
- Why does a recession cause a trade deficit to increase?arrow_forwardPlease define trade surplus, deficit and balance concepts. What currency strategy would you suggest to resolve a trade deficit problem? Please explain your answer with a numerical example.arrow_forwardThe balance of trade shows a deficit of $200 million. With the value of exports being $300 million, what should be the value of imports?arrow_forward
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