.U.S. trade deficit grows
The Commerce Department report said that exports of goods and services were $187.1 billion, while imports were $232.1 billion.
Source: The New York Times, July 3, 2013
Explain how the United States pays for its net export deficit.
4.The U.S. dollar depreciates. Explain which of the following events could have caused the depreciation and why.
?The Fed intervened in the foreign exchange market. Did the Fed buy or sell U.S. dollars?
?People began to expect that the U.S. dollar would depreciate.
?The U.S. interest rate differential increased.
?Foreign investment in the United States increased.
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