Question: Please help me on this two question 1 Suppose US consumption rises but government spending and investment do not change. a. What will happen to

Please help me on this two question

1 Suppose US consumption rises but government spending and investment do not change.

a. What will happen to the US trade balance? Explain using an equation.

b. Now suppose that C, I, and G don't change but because of the pandemic there is a big decrease in consumption of services like restaurant meals and hotel rooms and a big increase in purchases of clothing and consumer electronics. What will happen to the US

trade balance?

2 Many people in Britain voted to leave the EU in part so that Britain could negotiate trade agreements with the US, China, and other countries. These people would also like to continue to export and import from the EU-27 without customs inspections or trade barriers. Is this possible? Explain why or why not.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!