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Chapter 23: Q. 41 (page 577)

Will nations that are more involved in foreign trade tend to have higher trade imbalances, lower trade imbalances, or is the pattern unpredictable?

Short Answer

Expert verified

Trade patterns are incalculable.

Step by step solution

01

Step1. Introduction

Foreign trade is the give and take of goods or services between international borders and regions which we call imports and exports.

02

Step2. Explanation

Foreign trade is generally unpredictable, and the pattern incalculable. Trade pattern depends on a various variety of factors which are also different like geography, economy, history, etc. because these factors are not fixed for all nations that’s why trade is also unpredictable.

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Most popular questions from this chapter

Many think that the size of a trade deficit is due to a lack of competitiveness of domestic sectors, such as autos. Explain why this is not true.

Using the national savings and investment identity, explain how each of the following changes (ceteris paribus) will increase or decrease the trade balance:

  1. A lower domestic savings rate
  2. The government changes from running a budget surplus to running a budget deficit
  3. The rate of domestic investment surges

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?

Describe a scenario in which a trade surplus benefits an economy and one in which a trade surplus is occurring in an economy that performs poorly. What key factors or factors are making the difference in the outcome that results from a trade surplus?

In recent decades, has the U.S. trade balance

usually been in deficit, surplus, or balanced?
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