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Explain why a merchandise trade deficit created by imports of consumer goods is more troublesome than a merchandise trade deficit created by imports of capital goods

 Explain why a merchandise trade deficit created by imports of consumer goods is more troublesome than a
              merchandise trade deficit created by imports of capital goods.

7.              Explain how the Federal Government’s attempts to control inflation can affect our current account balance.

8.              Explain how a small amount of international debt can become a very heavy burden for a developing
              economy.

9.              Explain the automatic correction mechanism that drives a country’s current account balance to zero.

10.              Explain the essential difference between fixed and flexible exchange rate systems.

11.              If a disequilibrium occurs in the foreign exchange market, what are possible solutions? Why might
              governments choose not to let the price of their currencies adjust to clear the market?

Feb 11 2020 View more View Less

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