Q58. Your text has a discussion of various ways nations can skew income,production, and price-level data. Why would any nation choose to do so?to avoid paying its debtsto avoid lower credit ratings or ease concerns of foreign investorsto keep the rich from getting richerto increase its external wealthQ17. Suppose that the new international relative price of computersincreases from the pre-trade price. If we then subtract the number ofcomputers purchased domestically at the new international price from thenumber of computers produced, we will get one point onforcomputers.Shoes500225U,150175200300Computersthe import demand curvethe export supply curvethe production possibilities frontierO the indifference curveO O O O

58. Your text has a discussion of various ways nations can skew income, roduction, and price-level data. Why would any nation choose to do so? to avoid paying its debts to avoid lower credit ratings or ease concerns of foreign investors to keep the rich from getting richer to increase its external wealth

58. Your text has a discussion of various ways nations can skew income, roduction, and price-level data. Why would any nation choose to do so? to avoid paying its debts to avoid lower credit ratings or ease concerns of foreign investors to keep the rich from getting richer to increase its external wealth

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 21SCQ: Explain briefly whether each of the following would be more likely to lead to a higher level of...

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Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the economy of this country in billions of dollars, where C is consumption, DI is disposable income, I is investment, and G is government purchases: C� = = 30+0.8×DI30+0.8×DI G� = = 5050 I� = = 6060 Initially, this economy had a lump sum tax. Suppose net taxes were $50 billion, so that disposable income was equal to Y – 50, where Y is real GDP. In this case, this economy's aggregate output demanded was ___________ . Suppose the government decides to increase spending by $10 billion without raising taxes. Because the spending multiplier is ____________ , this will increase the economy's aggregate output demanded by ____________ . Now suppose that the government switches to a proportional tax on income of 10%. Because consumers retain the remaining 90% of their income, disposable income is now equal to 0.90Y. In this case, the economy's aggregate output…
Why does the United States not have an absolute in coffee? Which country is leading in producing coffee for the United States?
The graph depicts the market for oil, with the assumption that the United States can import any amount of oil it chooses at the world free trade price. Adjust the graph to reflect what happens when a 50% import tax is imposed on oil. (graph in the image) Approximately how many million barrels are imported before the tax is imposed? imported oil:_________million barrels Approximately how many million barrels are imported after the tax is imposed? imported oil:________million barrel
Explain briefly whether each of the following would be more likely to lead to a higher level of trade for an economy, or a greater imbalance of trade for an economy. Living In an especially large country Having a domestic investment rate much higher than the domestic savings rate Having many other large economies geographically nearby Having an especially large budget deficit Having countries with a tradition of strong protectionist legislation shutting out imports
Q2. Since the 1930s, nations have actively pursued internal balance as a primary economic objective.Nations also consider external balance as an economic objective. A nation realizes overall balancewhen it attains internal balance and external balance.To achieve overall balance, nations implement expenditure-changing policies (monetary and fiscalpolicies), expenditure-switching policies (exchange-rate adjustments), and direct controls (price andwage controls). Page 3 of 3Although exchange-rate adjustments primarily influence a nation’s balance-of-payments position (current account), they have secondary impacts on the domestic economy. A nation with a balance-of-payments deficit and high unemployment could devalue its currency to resolve these problems. A nation with a balance-of-payments surplus and inflation could devalue its currency. Such policiesare dependent upon the willingness of other nations to refrain from implementing offsettingexchange-rate adjustments.For an open economy…
5:06 A & & & O M P Page 2 of 5 QUESTION 2 The table below contains data on international transactions for the country of Econia. All figures are in thousands of Econia Dollars (E$), and you may assume that there is no statistical discrepancy generated by the collection of the data on the various kinds of transactions. Complete the table by filling in the light-blue shaded cells. Payments from the rest of the world All figures in thousands of E$ Payments from Econia to the rest of the world Net Payments to Econia to Econia Sales and purchases of goods & services Factor payments 5,250 2,500 1,500 1,000 Transfers 750 1,250 -500 Sales & purchases of assets 10,000 Total Current Account 10,250 Total Financial Account Page 3 of 5 QUESTION A3
1.3 Using the gravity model calculate the value of trade between country I and J. You can assume: a=b=0.9, c=0.8 and A=0.5The GDP for country I is triple the GDP of country J. Country J GDP is equal to the product of the trading value of all developed countries listed in the given table. The distance between these countries is 28 km.
a) Compute the ratio of exports to imports for the total and for eachcategory of goods listed in the table. Add the ratios to the table (you can edit thetable by clicking on it. If by any chance this does not work for you, make yourown table and insert it here)
Declining transportation and communication costs in recent decades have enabled many domestic industries to move manufacturing to other countries where labor is cheaper-a phenomenon called offshoring. The memo observes, for example, that only about a third of the value of a vehicle imported from Mexico to the United States originates in Mexico, while 38% of it is "American value returning home," with the remainder coming from other countries. Which of the following are implications of this trend? O Bilateral trade balances are an increasingly misleading way to look at trade relations. O Trade tensions will cease to exist. O Protectionist measures, such as tariffs, are self-defeating. O Trade wars may become less common.
1. Notice how U.S. imports rose at roughly the same rate asthose of other countries until the 1970s. What accounts forthe acceleration of U.S. imports thereafter? 2. China’s exports rose spectacularly after the 1990s. Germanyincreased its exports in this period dramatically as well. Whatevidence do you see here for increasing competition for theUnited States in a globalizing economy?
What would be the effect of a devaluation on a country’s imports and exports? If a country imports most ofthe goods included in the basket of goods and servicesused to calculate the CPI, what do you think the effectwill be on this country’s inflation rate?
How does global import and export business impact goods from a supply demand perspective when we can create these resources in the US?