The impact of increasing imports rather than exports.

Question

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Answer 1

Question

Chapter 26, Problem 1DQ

To determine

The impact of increasing imports rather than exports.

Expert Solution & Answer

Explanation of Solution

Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows trade deficit of the country. Aggregate demand is the sum of consumption, investment, government expenditure, and net export. Since the net export is a factor in calculating aggregate demand, trade deficit will cause a decrease in aggregate demand. On the other hand, the benefit of trade deficit can be summarized as the increase in the ability to consume goods and services, which increases the production. An increase in imports means an increase in foreign capital inflow to the country, which will compensate the shortage of savings. Otherwise, this may lead to government deficit.

Economics Concept Introduction

Trade deficit: Trade deficit refers to a situation where the imports of a country are higher than the exports by the country.

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Answer 2

Question

Chapter 26, Problem 1DQ

To determine

The impact of increasing imports rather than exports.

Expert Solution & Answer

Explanation of Solution

Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows trade deficit of the country. Aggregate demand is the sum of consumption, investment, government expenditure, and net export. Since the net export is a factor in calculating aggregate demand, trade deficit will cause a decrease in aggregate demand. On the other hand, the benefit of trade deficit can be summarized as the increase in the ability to consume goods and services, which increases the production. An increase in imports means an increase in foreign capital inflow to the country, which will compensate the shortage of savings. Otherwise, this may lead to government deficit.

Economics Concept Introduction

Trade deficit: Trade deficit refers to a situation where the imports of a country are higher than the exports by the country.

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Answer 3

Question

Chapter 26, Problem 1DQ

To determine

The impact of increasing imports rather than exports.

Expert Solution & Answer

Explanation of Solution

Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows trade deficit of the country. Aggregate demand is the sum of consumption, investment, government expenditure, and net export. Since the net export is a factor in calculating aggregate demand, trade deficit will cause a decrease in aggregate demand. On the other hand, the benefit of trade deficit can be summarized as the increase in the ability to consume goods and services, which increases the production. An increase in imports means an increase in foreign capital inflow to the country, which will compensate the shortage of savings. Otherwise, this may lead to government deficit.

Economics Concept Introduction

Trade deficit: Trade deficit refers to a situation where the imports of a country are higher than the exports by the country.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 26, Problem 1DQ

To determine

The impact of increasing imports rather than exports.

Expert Solution & Answer

Explanation of Solution

Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows trade deficit of the country. Aggregate demand is the sum of consumption, investment, government expenditure, and net export. Since the net export is a factor in calculating aggregate demand, trade deficit will cause a decrease in aggregate demand. On the other hand, the benefit of trade deficit can be summarized as the increase in the ability to consume goods and services, which increases the production. An increase in imports means an increase in foreign capital inflow to the country, which will compensate the shortage of savings. Otherwise, this may lead to government deficit.

Economics Concept Introduction

Trade deficit: Trade deficit refers to a situation where the imports of a country are higher than the exports by the country.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 26, Problem 1DQ

To determine

The impact of increasing imports rather than exports.

Expert Solution & Answer

Explanation of Solution

Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows trade deficit of the country. Aggregate demand is the sum of consumption, investment, government expenditure, and net export. Since the net export is a factor in calculating aggregate demand, trade deficit will cause a decrease in aggregate demand. On the other hand, the benefit of trade deficit can be summarized as the increase in the ability to consume goods and services, which increases the production. An increase in imports means an increase in foreign capital inflow to the country, which will compensate the shortage of savings. Otherwise, this may lead to government deficit.

Economics Concept Introduction

Trade deficit: Trade deficit refers to a situation where the imports of a country are higher than the exports by the country.

Answer 6

Chapter 26, Problem 1DQ

To determine

The impact of increasing imports rather than exports.

Expert Solution & Answer

Explanation of Solution

Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows trade deficit of the country. Aggregate demand is the sum of consumption, investment, government expenditure, and net export. Since the net export is a factor in calculating aggregate demand, trade deficit will cause a decrease in aggregate demand. On the other hand, the benefit of trade deficit can be summarized as the increase in the ability to consume goods and services, which increases the production. An increase in imports means an increase in foreign capital inflow to the country, which will compensate the shortage of savings. Otherwise, this may lead to government deficit.

Economics Concept Introduction

Trade deficit: Trade deficit refers to a situation where the imports of a country are higher than the exports by the country.

Answer 7

Chapter 26, Problem 1DQ

To determine

The impact of increasing imports rather than exports.

Answer 8

Expert Solution & Answer

Explanation of Solution

Net export is the additional value of export over the imports, which can be calculated by subtracting imports from exports. When the import is greater than exports, it shows trade deficit of the country. Aggregate demand is the sum of consumption, investment, government expenditure, and net export. Since the net export is a factor in calculating aggregate demand, trade deficit will cause a decrease in aggregate demand. On the other hand, the benefit of trade deficit can be summarized as the increase in the ability to consume goods and services, which increases the production. An increase in imports means an increase in foreign capital inflow to the country, which will compensate the shortage of savings. Otherwise, this may lead to government deficit.