Suppose that during a recent year for the United States, merchandise imports were $2.2 trillion, unilateral...

Suppose that during a recent year for the United States, merchandise imports were $2.2 trillion, unilateral transfers were a net outflow of $0.2 trillion, service exports were $0.3 trillion, service imports were $0.1 trillion, and merchandise exports were $1.6 trillion.

The merchandise trade deficit was ? trillion. (Enter your response rounded to one decimal place.)

The balance on goods and services was ? trillion. (Enter your response rounded to one decimal place and include a minus sign if necessary.)

The current account balance was ? trillion. (Enter your response rounded to one decimal place and include a minus sign if necessary.)

Solutions

Expert Solution

Merchandise trade deficit = total value of merchandise imported - total value of merchandise exported = $2.2 trillion - $ 1.6 trillion = $ 0.6 trillion

Total exports of goods and services = $1.6 trillion + $0.3 trillion = $1.9 trillion

Total imports of goods and services = $2.2 trillion + $0.1 trillion = $2.3 trillion

Balance of trade = Total exports- total imports = $1.9 trillion- $2.3 trillion = - $ 0.4 trillion

So there is a balance of trade deficit of $0.4 trillion.

Current account balance = balance of trade + net income from abroad + net current transfers

In the present case, balance of trade = - $0.4 trillion

Net income from abroad = 0

Net current transfers = net inflows of transfer income - net outflows of transfer income = - $ 0.2 trillion

Current account balance = - $0.4 trillion + 0 - $0.2 trillion = - $0.6 trillion

Therefore, there is a balance of trade deficit of $0.6 trillion.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

What were the United States' main imports and exports during the 1990s? What trade barriers were...

What were the United States' main imports and exports during the 1990s? What trade barriers were in place during that decade? What are the pros and cons of the trade barriers used?

What happened with the United States Imports/Exports during the Great Recession?

The United States has almost $25 Trillion in debt of which $20 Trillion trades daily as...

The United States has almost $25 Trillion in debt of which $20 Trillion trades daily as government bills, bonds, and notes – obligations which in theory have to be retired when they mature. Lately the interest rates have been below 2% reflecting an economy struggling to grow. What impact will that have on the ability to retire the debt?

Suppose that the united states currently imports 1.0 million pairs of shoes from china at $20...

Suppose that the united states currently imports 1.0 million pairs of shoes from china at $20 each. With a 50% tariff, this made the consumer price in the United States $30.The price of shoes in Mexico is $25 suppose that as a result of free trade agreement with Mexico, the United states imports 1.2 million pairs of shoes from Mexico and none from china. What are the gains and losses to U.S consumers, U.S producers, and U.S government and the...

Suppose members of the United States, Mexico, and Canada trade agreement (USMCA) agree to reduce imports...

Suppose members of the United States, Mexico, and Canada trade agreement (USMCA) agree to reduce imports of foreign oil and set a price floor for North American oil. Briefly describe the impact this might have for Alberta oil producers, and for Canadian oil consumers. (200 words)

During recent decades, the rate of increase in the output per hour in the United States...

During recent decades, the rate of increase in the output per hour in the United States has been lower than in the early 1960s. This development has caused enormous concerns in Washington and elsewhere. In recent years, some observers have asserted that the productivity slowdown has been due in part to a decline in the rate of innovation in the United States. Have you seen this trend in your industry? If so, identify the cause and effects. If not, what...

1. The current population of the United States is 328.2 million with 2.2% of the population...

1. The current population of the United States is 328.2 million with 2.2% of the population is engaged in R&D at an efficiency rate of 1/500 per million persons per year. (a) If R&D is the only source of total-factor productivity growth what is the growth rate of labor efficiency in the United States? (b) If the growth rate of total factor productivity is 0.75% per year, what is the value of α in the Cobb-Douglas production function?

Find the most recent federal deficit as a percentage of GDP of the United States. Suppose...

Find the most recent federal deficit as a percentage of GDP of the United States. Suppose that the federal budget deficit was eliminated and there was no change in private saving. What would be the effect on the long run capital stock per worker? What would be the effect on long run output per worker?

In a recent Gallup poll, 1003 randomly selected adults in the United States were asked if...

In a recent Gallup poll, 1003 randomly selected adults in the United States were asked if they have a gun in their home, and 37.2% of them answered “yes”. Construct a 95% confidence interval estimate of the percentage of all adults who would answer “yes” when asked if they have a gun in their home. [Write your answer as a complete sentence]

In 2020 the United States will use some $10 trillion of manufactured goods as measured by...

In 2020 the United States will use some $10 trillion of manufactured goods as measured by the price level as it will be in 2020—producing $9 trillion and paying for the extra $1 trillion by exporting services. Let’s use that as our unit of the quantity of manufactures—$1 worth at 2020 prices is equal to one unit of manufactured goods. And let’s set our index of the price of manufactured goods in 2000 equal to 1. Suppose the supply curve...

Subjects

Question

Suppose that during a recent year for the United​ States, merchandise imports were ​$2.2 ​trillion, unilateral...

Solutions

Expert Solution

Related Solutions

Suppose that during a recent year for the United States, merchandise imports were $2.2 trillion, unilateral...