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Chapter 23: Q. 16 (page 576)

Both the United States and global economies are booming. Will U.S. imports and/or exports increase?

Short Answer

Expert verified

U.S. imports will increase.

Step by step solution

01

Step 1. Given

It is given that both the United States and global economies are booming.

02

Step 2. Explanation

Import sales will rise as a result of a booming economy, which will raise overall demand for goods. If our trade partners' economies are doing well, they will purchase more of our products, resulting in a rise in US exports.

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Most popular questions from this chapter

At one point Canada’s GDP was \(1,800 billion and its exports were \)542 billion. What was Canada’s export ratio at this time?

What are the two main sides of the national savings

and investment identity?

In 2001, the United Kingdom's economy exported goods worth £192 billion and services worth another £77 billion. It imported goods worth £225 billion and services worth £66 billion. Receipts of income from abroad were £140 billion while income payments going abroad were £131 billion. Government transfers from the United Kingdom to the rest of the world were £23 billion, while various U.K government agencies received payments of £16 billion from the rest of the world.

a. Calculate the U.K. merchandise trade deficit for 2001.

b. Calculate the current account balance for 2001.

c. Explain how you decided whether payments on foreign investment and government transfers counted on the positive or the negative side of the current account balance for the United Kingdom in 2001.

What is more important, a country’s current account balance or GDP growth? Why?

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