Central Georgia Technical College Economics for Public Administrators Paper
ANSWER
- A recent depreciation in the value of the U.S. dollar would impact the U.S. national balance and net exports through changes in trade dynamics. A weaker dollar makes U.S. exports relatively cheaper for foreign buyers, leading to an increase in the quantity demanded for U.S. goods abroad. Simultaneously, imports become relatively more expensive for U.S. consumers, which can lead to a decrease in the quantity demanded for foreign goods domestically. This scenario would likely result in an improvement in the U.S. trade balance as exports rise and imports decline, contributing to a narrowing of the trade deficit. However, the extent of this impact would also depend on various factors including the price elasticity of exports and imports, as well as potential changes in global economic conditions.
- Agree. A depreciation of the U.S. dollar would indeed lead to an increase in exports and a decrease in imports, all else being equal. The logic behind this lies in the fact that a weaker dollar makes U.S. goods more attractive to foreign buyers and simultaneously makes foreign goods less attractive to U.S. consumers. As a result, the trade balance is likely to improve, leading to a net increase in the aggregate demand for domestically produced goods. However, it’s important to note that economic conditions are complex and multifaceted, and the real-world outcomes might be influenced by additional factors beyond the scope of this statement.
QUESTION
Description
1. The change in the exchange rate affects the national balance. Suppose the relative value of the U.S. dollar has gone down recently. How would this affect the U.S. national balance and net exports? Explain this using at least 100 words with relevant economic concepts and theory. Answer in couple sentences
2. Agree or disagree within 2-3 sentences
In the event that the U.S. dollar depreciates, or drops in relative value to foreign currencies, and the domestic price level, income / employment and interest rates all remain the same, then the U.S. national balance will benefit. Under these conditions, exports will increase and imports will decrease as net aggregate demand of substitute domestic products increases. With other economic contributing factors remaining constant, the U.S. will see an increase in the net aggregate demand of domestically produced goods.
Fill in the order form and submit all your files, including instructions, rubrics, and other information given to you by your instructor.
Once you complete filling the forms, complete your payment. We will get the order and assign it to a writer.
When your order is completed, it’s assigned to an editor for approval. The editor approves the order.
Once approved, we will upload the order to your account for you to download. You can rate your writer or give your customer review.
