Question: Suppose the US dollar has beenappreciating for some time compared to other foreign currency.What does the dollar appreciating imply about the following for the US:

Suppose theUS dollar has beenappreciatingfor some time compared to other foreign currency.What does the dollar appreciating imply about the following for the US:

  1. USexports and imports: Will exports increase or decrease? Will imports increase or decrease?
  2. Net exports: Will exports be larger or smaller than imports? Will net exports be positive, negative, or 0?
  3. US net capital outflow (NCO): Will it be positive, negative, or 0?
  4. Saving and investment: Will S>I, S
  5. Will the US be in atrade surplus, shortage, or have balanced trade?

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