ollowing would definitely cause a decrease in the price level for the U.S.? a transition from peace to war and a decrease in productivity an increase in interest rates and a good supply shock involving electricity an increase in wages and an appreciation of the U.S. dollar an expectation by business owners of worse business conditions and an increase in wages an increase in the cost of oil and an increase in tax rates
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- Will a direct increase in the price of U.S. goods relative to foreign goods lead to a change in the quantity demanded of Real GDP or to a change in Aggregate Demand? Will a change in the exchange rate that subsequently increases the price of U.S. goods relative to foreign goods lead to a change in the quantity demanded of Real GDP or to a change in Aggregate Demand?• A series of natural disasters occurs that causes the following changes in the U.S. economy: The real gross domestic product drops by 4 percent. The inflation rate rises from 5 percent to 10 percent. Unemployment increases from 6 percent to 10 percent. Suppose that the federal government, holding taxes constant, increases its spending and the Federal Reserve increases its purchases of bonds. Explain how exports and imports will be affected by the changes in output and prices resulting from the policies described.An expected decline in demand for consumer goods in the U.S. means there will be less imports into the U.S. Less imports in the U.S. translates to a reduction in exports from China, which is significant as the U.S. has the largest GDP of all nations. As the U.S. is reducing imports, it will be purchasing less goods from China, which means the U.S. will be giving up less dollars to purchase Chinese goods with the yuan. Will a decline in demand for consumer goods in the U.S. impact China's economy given the above information? If so, how would that affect the dollar-yuan exchange rate?
- Why are aircraft one of the United States' greatest exports? The demand for aircraft is high. The US has a great deal of technological knowledge. The American dollar is cheap compared to other currencies.Q2-8 The simple Marshall-Lerner condition would suggest that one of the following cases would produce a worsening of the trade balance if the country's currency depreciated. Which one?(The negative sign on elasticities is being ignored; also, assume that trade is initially balanced.) Select one: a. elasticity of demand for exports = 0.8; elasticity of demand for imports = 0.5 b. elasticity of demand for exports = 0.4; elasticity of demand for imports = 0.6 c. demand curve for exports is vertical; demand curve for imports is horizontal d. elasticity of demand for exports = 0.8; elasticity of demand for imports = 0.1A semiconductor is a key component in your laptop, cell phone, and iPod. The table provides information about the market for semiconductors in the United States. Producers of semiconductors can get $18 a unit on the world market. Due to loss of competitiveness brought on by appreciation of the exchange rate and the high production costs, U.S. government reduce the export (or limit the supply of domestic producers) by imposing an export quota of 20 billion units per year. What happens to U.S. price of semiconductors, the quantity of semiconductors bought by U.S. people, and the quantity of semiconductors exported? [hint: use equation to calculate the equilibrium]
- If the U.S. Dollar appreciates, foreigners will find American goods more expensive because they have to spend less for those goods in USD, meaning with higher prices, the number of U.S. goods being exported will likely drop and leads to a reduction in the Gross Domestic Product (GDP). True or FalseMexico and the United States are trade partners. Each country has a zero current account balance and is operating in long-run equilibrium. Assume that the inflation rate in the United States is slowing relative to Mexico's inflation rate. (a) How will the inflation rate change in the United States affect: (i) Mexico's demand for U.S. goods and services? (ii) net exports of Mexico? Explain. (b) Illustrate the impact of the change you identified in part (a) on a fully labeled AD–AS model for the economy of Mexico. Use arrows to indicate any changes in AD, real GDP, and price level. (c) Ceteris paribus, will the national income of the United States increase, decrease, or remain the same? (d) On side-by-side and fully labeled foreign exchange market graphs, illustrate the impact of the change in relative inflation on the supply of Mexican pesos and on demand for U.S. dollars. Use arrows to indicate the change in the equilibrium exchange rate for each currency.…Suppose Americans suddenly develop a strong taste for Canadian whiskey. What happens to the demand for Canadian dollars in the foreign exchange market? What happens to the value of Canadian dollars in the foreign exchange market? What about U.S. dollars? What happens to the quantity of net exports in Canada, other than whiskey, as a result of your answer in part b? What about the U.S.?
- PQ 8 The simple Marshall-Lerner condition would suggest that one of the following cases would produce a worsening of the trade balance if the country's currency depreciated. Which one? (The negative sign on elasticities is being ignoredf; also, assume that trade is initailly balanced) a. elasicity of demand for exports = .8; elasticity of demand for imports = .5 b. elasicity of demand for exports = .4; elasticity of demand for imports = .6 c. demand curve for exports is verttical; demand curve for imports is horizontal d. elasticity of demand for exports = .8; elasticity of demand for imports = .1Suppose that the U.S. dollar-Chinese yuan exchange rate is fixed by the U.S. and Chinese governments. Assume also that labor is immobile between the United States and China due to high transportation costs. Which of the following situations is likely to occur if there is a simultaneous increase in the demand for U.S. goods and a decrease in the demand for Chinese goods? a) The Chinese unemployment rate will increase, and the country will undergo hard economic times for a sustained period. b) The U.S. unemployment rate will increase, and the country will undergo hard economic times for a sustained period. c) The Chinese unemployment rate will initially rise but then drop as the Chinese yuan depreciates against the U.S. dollar. d) The Chinese unemployment rate will initially rise but soon drop as unemployed Chinese move to the United States for employment.Consumers and a fresh round of stimulus money pushed demand for U.S. imported goods to a record high in March, further expanding the trade deficit. The foreign-trade gap in goods and services expanded 5.6% from the prior month to a seasonally adjusted $74.4 billion (Links to an external site.) in March, the Commerce Department said Tuesday. Imports rose 6.3% to $274.5 billion for the month, fueled by higher shipments of items including toys, furniture, cellphones, automobiles and semiconductors. The previous record for imports, on a seasonally but not inflation adjusted basis, was recorded in October 2018 when the U.S. purchased foreign goods and services worth $266.72 billion. Exports rose 6.6% to $200 billion in March, following a one-month decline in February, as supply-chain disruptions caused by winter weather eased. Using the expenditure model what impact will this have on the US GDP? Explain in detail in less than 100 words