Critical Thinking: Let's make it as realistic as possible to the US. In 2020, the US had both a government and trade deficit. With that in mind, draw the complete circular flow diagram solving and filling in all values. (Notes, all values are in trillions of dollars; government spending and taxes do not include transfers) Real GDP: 18.38 Consumption: 12.63 Government Spending: 3.36 Taxes: 2.06 Imports: 3.15 Exports: 2.21

Critical Thinking: Let's make it as realistic as possible to the US. In 2020, the US had both a government and trade deficit. With that in mind, draw the complete circular flow diagram solving and filling in all values. (Notes, all values are in trillions of dollars; government spending and taxes do not include transfers) Real GDP: 18.38 Consumption: 12.63 Government Spending: 3.36 Taxes: 2.06 Imports: 3.15 Exports: 2.21

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter4: The Aggregate Economy

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

The macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariffwill reduce South Africa's trade deficit A Because exports will be promoted and imports cannot possibly changeB Because imports will be reduced and exports cannot possibly changeC Only if the tariff has no impact on South Africa's spending or incomeD Only if the tariff leads to increased income in South Africa relative to its spending
Assume that the gross domestic product is $6,000, personal disposal income is $5,100, thegovernment deficit is $200, consumption is $3,800, and the trade deficit is $100. What is the sizeof: Taxes
What is a national balance of trade? What does someone mean when he or she says that the balance of trade is favorable? Unfavorable? 2. What might be inferred if a nation has a continual deficit in its balance of payments? 3. What is an owner of a corporation called? What is the difference between a S- corporation and an C-corporation?
In 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?
Supposed that a small open economy is running a trade deficit. The government enacts protectionist trade policies (such as a tariff or quota on imports) with a goal of reducing the trade deficit. Show the impact on the trade deficit? what is the impact on the volume of trade? explain whether the government was succesful in reaching its goal.
The country of Meditor, a small country with a closed economy, uses the merit as its currency. Recent national income statistics showed that it had GDP of $600 million merits, no government transfer payments, taxes of $150 million merits, a budget surplusof $40 million merits, and investment of $100 million merits. What was its consumption and government expenditures on goods and services? Please show you calculation
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.)
The macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariff will reduce South Africa's trade deficit A. Because exports will be promoted and imports cannot possibly change B.Because imports will be reduced and exports cannot possibly change C.Only if the tariff has no impact on South Africa's spending or income D.Only if the tariff leads to increased income in South Africa relative to its spending
The table below includes information on the hypothetical economy of Hersty. Assume the government is running a deficit. Enter the missing values in the table and answer the question below the table. Note that all values are in millions of Herstian dollars. Budget Deficit Investment Spending Private Savings Trade Deficit 2010 125 75 150 2011 110 400 110 2012 650 105 365 The country of Hersty has a budget deficit and trade deficit, a situation referred to as the twin deficits. Which of the following is the most accurate statement about the twin deficits? They are identical twins, always the same size. It is common to see trade and budget deficits increase at the same time. Budget deficits lead to lower interest rates, which encourage foreigners to buy U.S. bonds rather than U.S. goods and services. The twin deficits result in an outflow of foreign financial investment.
this question has three questions . What proportion of this country’s total gross capital formation (or investment) can be financed from national savings, and what part must be financed from external resources? What are the various forms these external resources could take? show in graph how the current account got a deficit of 12% GDP and the budget deficit of 3%. Suppose a country has a large current account deficit (in the vicinity of 12% of GDP). It has a gross capital formation rate of 28% of GDP. The country has an overall budget deficit of 3% of GDP. The share of Household and NPISHs Final Consumption Expenditure is 68% of GDP and that of General Government Final Consumption Expenditure is 12%. What proportion of this country’s total gross capital formation (or investment) can be financed from national savings and what part must be financed from external resources? What are the various forms these external resources could take?
If imports exceed exports, is it a trade deficit or a trade surplus? What about if exports exceed imports?
When is a trade deficit likely to work out well for an economy? When is it likely to work out poorly?