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Unformatted text preview: lowed to sell their products in U.S. markets, they contend, while foreign govern-ments impede U.S. firms from selling U.S. products abroad. Imagine that you are the president and you want to end these trade deficits. What should you do? Should you try to limit imports, perhaps by imposing a quota on the import of cars from Japan? Or should you try to influence the nations trade deficit in some other way? To understand what factors determine a countrys trade balance and how government policies can affect it, we need a macroeconomic theory of the open A M A C R O E C O N O M I C T H E O R Y O F T H E O P E N E C O N O M Y 679...
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.
- Spring '10