Questions from General Economics

Q: Suppose the United States decides to subsidize the export of U.

Suppose the United States decides to subsidize the export of U.S. agricultural products, but it does not increase taxes or decrease any other government spending to offset this expenditure. Using a th...

Q: Suppose that real interest rates increase across Europe. Explain how this

Suppose that real interest rates increase across Europe. Explain how this development will affect U.S. net capital outflow. Then explain how it will affect U.S. net exports by using a formula from the...

Q: Suppose that Americans decide to increase their saving. a.

Suppose that Americans decide to increase their saving. a. If the elasticity of U.S. net capital outflow with respect to the real interest rate is very high, willthis increase in private saving have a...

Q: Japan generally runs a significant trade surplus. Do you think this

Japan generally runs a significant trade surplus. Do you think this is most related to high foreign demand for Japanese goods, low Japanese demand for foreign goods, a high Japanese saving rate relati...

Q: Suppose that Congress is considering an investment tax credit, which subsidizes

Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment. a. How does this policy affect national saving, domestic investment, net capital outflow, the inter...

Q: Why are budget deficits and trade deficits sometimes called the twin deficits

Why are budget deficits and trade deficits sometimes called the twin deficits?

Q: Suppose that a textile workers’ union encourages people to buy only American

Suppose that a textile workers’ union encourages people to buy only American-made clothes What would this policy do to the trade balance and the real exchange rate? What is the impact on the textile i...

Q: Describe supply and demand in the market for loanable funds and the

Describe supply and demand in the market for loanable funds and the market for foreign-currency exchange. How are these markets linked?

Q: Describe the sources of supply and demand in the market for loanable

Describe the sources of supply and demand in the market for loanable funds and the market for foreign-currency exchange.

Q: You consume only soda and pizza. One day, the price

You consume only soda and pizza. One day, the price of soda goes up, the price of pizza goes down, and you are just as happy as you were before the price changes. a. Illustrate this situation on a gra...