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Complete the following questions: use specific examples to support your answers. If exports increase and imports...

Complete the following questions: use specific examples to support your answers.

  1. If exports increase and imports decrease in the U.S., what happens to the trade deficit? Will this help or hurt the U.S.? In what ways is a bigger trade deficit a problem for the country? What good is the deficit? Hint: Use the currency market supply and demand to determine the exchange rate.

  2. In what ways is the trade between countries increasing? Is trade good or bad for U.S.? What is the alternative to trade? What kind of lifestyle will the US have if the alternative is adopted? Is it a viable alternative to trade? Be specific.

  3. If there is increase in U.S. tourism and an increase in U.S. interest rates, what will happen to the U.S. dollar compared to other currencies in the foreign exchange market? Use the supply and demand graph to determine the answer. Explain your answer based on the graph.

  4. In the future, based on the opportunity cost for the U.S. workers, companies, and resources, what type of products or services will the country produce? What will continue to make the U.S. "richer" in the future? Consider U.S. resources and how they can best be used.

  5. If the exchange rate between US and Mexico is 1 U.S. dollar for 100 Icelandic Kronas, the U.S. economy is stronger than the Icelandic economy, and U.S. consumers have 100 times more buying power than an Icelandic consumers. Do you agree or disagree with the statement.

  6. As trade continues to grow, is there any reason that the U.S. is different than any other country? Is the world one big market with no meaning of what a country is? What do you think? Be specific and support your point of view.

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Answer #1

EXPORT AND IMPORT:

The export and import is explain in given below

When increase in exports and reduction in imports in the United States will lead to growth in the net exports .

Thus improve the trade balance of the country and thus lead to deterioration in trade shortage of the nation.

This will aid United States as the trade balance of the republic will progress.

A better trade shortage of the state is a problem for the nation as it leads to upsurge in the present account deficit of the country.

Thus leads to decline in investor sentiment of the country.

This will lead to devaluation of the country's exchange rate and thus decline in foreign investment of the country.

Deficit is good if the increased government expenditure is used to finance capital equipment’s and used as capital spending which will generate rise in total revenue later

Increase in exports and decrease in imports in the United States will lead to increase in the net exports and thus improve the trade balance of the country and thus lead to decline in trade deficit of the country.

This will help United States as the trade balance of the country will improve.

A bigger trade deficit of the country is a problem for the country as it leads to increase in the current account deficit of the country.

Thus leads to decline in investor sentiment of the country.

This will lead to depriciation of the country's exchange rate and thus decline in foreign investment of the country.

Deficit is good if the increased government expenditure is used to finance capital equipment and used as capital expenditure which will generate increase in total revenue later.

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