Homework 7 - Maximum number of choices allowed is{0 Submitted by ZEHLER IAN(IFZ5002 on 4:50:06 PM Select regrade mode Choose a regrade mode Change

Homework 7 - Maximum number of choices allowed is{0...

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Maximum number of choices allowed is {0}.Submitted by ZEHLER, IAN (IFZ5002) on 4/26/2015 4:50:06 PMSelect regrade mode Choose a regrade mode Change points or correct answer Drop question Give full credit This regrade will affect all users who submitted this Assessment containing this question. Regrade not available This is a linked Assessment or Question. Only the owner has edit rights. Regrade not available This content item's settings prohibit regrade on this item. Points Awarded67.00Points Missed33.00Percentage67.0%1. Explain, in five sentences or less, exactly why the trade deficit in the US increased from 1995 to2000. There are two specific reasons. Make sure you explain clearly (the intuition) why each reason would add to our trade deficit.Ok CancelCancelCancel
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Feedback: TWO REASONS: 1) Very strong growth in the US economy relative to the rest of theworld, increasing our appetite for foreign goods resulting in a trade deficit (recall the marginal propensity to import!). 2) Various financial crises (E. Asia, Russian) that resulted in the $ US appreciating (safe haven argument). The stronger dollar made imports cheaper (we buy more) and exports more expensive resulting in a larger trade deficit. TWO REASONS: 1) Very strong growth in the US economy relative to the rest of the world, increasing our appetite for foreign goods resulting in a trade deficit (recall the marginal propensity to import!). 2) Various financial crises (E. Asia, Russian) that resulted in the $ US appreciating (safe haven argument). The stronger dollar made imports cheaper (we buy more) and exports more expensive resulting in a larger trade deficit. Table for Individual Question FeedbackPoints Earned: 15.0/20.0 Correct Answer(s):TWO REASONS: 1) Very strong growth in the US economy relative to the rest of the world, increasing our appetite for foreign goods resulting in a trade deficit (recallthe marginal propensity to import!). 2) Various financial crises (E. Asia, Russian) that resulted in the $ US appreciating (safe haven argument). The stronger dollar made imports cheaper (we buy more) and exports more expensive resulting in a larger trade deficit. 2. Suppose that you received your college degree from Penn State and nailed a great job over in Europe in the summer of 2001. Given that your family remains in the US, you make sure that you visit the family every November by traveling from Europe to the US. We are going to compare the cost of this vacation, in terms of euros, during two different periods: November 2002 and November 2012. We assume that the cost of the trip, in terms of $ US, remains the same at $1,000 in both periods. Using the data below, we will compare the euro cost of the trip in November 2002 vs. the euro cost of the trip in November 2012.
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