Chapter 23: Q. 34 (page 577)
If a country is a big exporter, is it more exposed to global financial crises?
If a country is a big exporter, it is more exposed to global financial crises.
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Does a trade surplus mean an overall inflow of
financial capital to an economy, or an overall outflow of
financial capital? What about a trade deficit?
If the trade deficit of the United States increases, how is the current account balance affected?
Is it better for your country to be an international lender or borrower?
In 2001, the United Kingdom's economy exported goods worth £192 billion and services worth another £77 billion. It imported goods worth £225 billion and services worth £66 billion. Receipts of income from abroad were £140 billion while income payments going abroad were £131 billion. Government transfers from the United Kingdom to the rest of the world were £23 billion, while various U.K government agencies received payments of £16 billion from the rest of the world.
a. Calculate the U.K. merchandise trade deficit for 2001.
b. Calculate the current account balance for 2001.
c. Explain how you decided whether payments on foreign investment and government transfers counted on the positive or the negative side of the current account balance for the United Kingdom in 2001.
The United States exports 14% of GDP while Germany exports about 50% of its GDP. Explain what that means.
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