Assume that in 2010, a country had a GDP of $500$500 billion, a budget deficit of $6$6 billion, and a trade deficit of $10$10 billion. In five years, the budget deficit became $4.0$4.0 billion, and the trade deficit as a percentage of GDP changed by 0.70.7 percentage point(s). GDP remained unchanged. Calculate the dollar value of the trade deficit in 2015.
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Assume that in 2010, a country had a
Calculate the dollar value of the trade deficit in 2015.
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- How could a greater budget deficit increase the trade deficit? What happens to the multiplier if there is an increase in the marginal propensity to consume? What would likely happen to the level of economic activity if the government took the necessary steps to reduce the deficit significantly in a relatively short period of time? When is the most appropriate time to reduce the deficit?If a country has a trade deficit of $30 billion, which of the following can be true? Group of answer choices The country's exports are $150 billion and its imports are $120 billion. The country's exports are $110 billion and its imports are $140 billion. The country's exports are $140 billion and its imports are $40 billion. The country's exports are $120 billion and its imports are $140 billion.The table below shows data on U.S. exports and imports of goods and services for five years. For each of these years, indicate whether the United States was running a trade surplus or deficit, and dollar amount of the surplus or deficit, and calculate the ratio as a percent of the surplus deficit to U.S. exports. Instructions: In the event a deficit, do NOT include a negative sign (-) for either the dollar amount or the ratio (.% of exports). Enter your responses rounded to one decimal place. U.S. Exports (billions of dollars) U.S. Imports (billions of dollars) Year Surplus or deficit Amount of surplus/deficit (billions of dollars) Surplus/ deficit as a percent of exports 1 457.1 642.0 Deficit 2 531.2 667.2 Deficit % 3 592.7 696.6 Deficit 4 745.0 721.5 Surplus % 687.6 720.4 Deficit %
- Sketch a diagram of how a budget deficit causes a trade deficit. (Hint: Begin with what will happen to the exchange rate when foreigners demand more U.S. government debt.)During 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?Generally, how does the standard of living in the United States today compare to the standard of living in other countries? To the standard of living in the United States a century ago?The Bureau of Economic Analysis, or BEA, is a government agency collecting various U.S. economy statistics. From the BEA’s website, find data for the most recent year available on U.S. exports and imports of goods and services. Is the United States running a trade surplus or deficit? Calculate the ratio of the surplus or deficit to U.S. exports.There are many people out there providing opinions on the economy. How can differences of opinion about economic policy recommendations be resolved?
- The projected trade deficits for a country in 2021-2023 are in the following table: Net Year Exports (billion $) 2021 -10 2022 -5 2023 2024 You are asked to calculate the size of the trade surplus required to balance the sum of net exports for the 2021-2024 period in present discounted value terms. You know that future values are discounted at rate i = 3% . The 2024 surplus that accomplishes this goal is $. billion. Round your answer to the nearest tenth.How could an increase in a nation's fiscal deficit increase its trade deficit?4. Analyzing the effects of a trade deficit Suppose the U.S. government has just hired you to analyze the following scenario. Assume the U.S. agricultural industry grows concerned about the amount of fresh fruit imports to the United States, a practice that harms domestic producers. Industry experts claim that implementing a tariff on imports would reduce the size of the trade deficit. Complete the following exercise in order to help you analyze this claim. The following graph shows the demand and supply of U.S. dollars in a model of the foreign-currency exchange market. Shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the tariff. REAL EXCHANGE RATE (Units of foreign currency per dollar) Supply QUANTITY OF DOLLARS Demand Demand -0- Supply Ⓡ
- 4. Analyzing the effects of a trade deficit Suppose the U.S. government has just hired you to analyze the following scenario. Assume the U.S. agricultural industry grows concerned about the amount of fresh fruit imports to the United States, a practice that harms domestic producers. Industry experts claim that implementing a tariff on imports would reduce the size of the trade deficit. Complete the following exercise in order to help you analyze this claim. The following graph shows the demand and supply of U.S. dollars in a model of the foreign-currency exchange market. Shift the demand curve, the supply curve, or both to show what would happen if the government decided to implement the tariff. REAL EXCHANGE RATE (Units of foreign currency per dollar) Supply QUANTITY OF DOLLARS Demand Demand Supply ?When a country exports more goods and services than it imports, this is called Multiple Choice a balance of trade deficit. a balance of trade surplus. a positive terms of trade. a negative terms of trade.What is the difference between a government deficit and a trade deficit ?