Answer to Question #49879 in Macroeconomics for lauren

Question

what is happening to the U.S. trade balance in each of these situations?
a. higher international trade barriers for imported products in U.S.
b. prices in US increases more than prices abroad
c. economic recession starts in Canada
d. nominal exchange rate of US dollar appreciates

Answer 1

U.S. trade balance in each of these situations will change in such way:
a. higher international trade barriers for imported products in U.S. will increase U.S. trade balance.
b. prices in US increases more than prices abroad - this will decrease U.S. trade balance.
c. economic recession starts in Canada - this will increase U.S. trade balance.
d. nominal exchange rate of US dollar appreciates - this will decrease U.S. trade balance.