Question

Global trade is an essential part of almost every economy on the planet. The import of products fills a demand that cannot not be met or efficiently met in the home country. Exports are demanded by markets where they cannot produce or efficiently produce the same products or services. The key is producing efficiently or at the lowest cost. The attractiveness of goods in one country or another is not always based on the quality, how it was manufactured or if it will create or save jobs. It comes down to where can I get the most for the money I have. A big part of this is the relative strength of the purchasing or selling countries currency. These can be volatile markets and make it difficult for the manufacturers to control where their customer purchase.

1. How a fiscal policy or variations in currency can change a trade surplus to a deficit or vice-versa?

2. What would you look for when purchasing products from other countries?

3. What fiscal policies may make your products more attractive?

Answer 1

answer-

1- Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. the variation in currency like the rising in currency value or decline in currency value can lead to trade surplus or trade deficit because if our country's currency having high value than the importing country then we can pay our debts in our currency which means we can improve our trade surplus by exporting more products and importing less products and pay that import in our currency.

2-when purchasing a products from another countries i would look for how much it would cost me in my home country and in other country and availability of that product. if i want to purchase a electronic item which is present in other country then i would look who much price for that product and how much tax i would have to pay for that product.

3-the fiscal policy of surplus would make my products more attractive in which my products would be exported more in foreign countries and i would spend less on importing. This policy is quite popular among the people of the country because through this, consumers get more money in their hands and as a result their purchasing power increases drastically. The government uses this by two ways. Either they spend more money on public works, provide benefits to the unemployed, spend more on projects that are halted in between or they cut taxes so that the individuals or businesses don’t need to pay much to the government.