5. In the following diagram D€ is the US demand curve for Euro and S€ is the US supply curve for Euro. If the exchange rate of Euro is US$1.5/€ then which of the following is true. $/€ 1.5 A) B) C) D) De 5 10 14 Se US has a balance of trade deficit of 4 billion Euro US has a balance of trade surplus of 5 billion Euro US has a balance of trade deficit of 2 billion Euro US has a balance of trade surplus of 9 billion Euro Answer: Qe (billions)
5. In the following diagram D€ is the US demand curve for Euro and S€ is the US supply curve for Euro. If the exchange rate of Euro is US$1.5/€ then which of the following is true. $/€ 1.5 A) B) C) D) De 5 10 14 Se US has a balance of trade deficit of 4 billion Euro US has a balance of trade surplus of 5 billion Euro US has a balance of trade deficit of 2 billion Euro US has a balance of trade surplus of 9 billion Euro Answer: Qe (billions)
Chapter28: International Trade And Finance
Section: Chapter Questions
Problem 11SQP
Related questions
Question
Transcribed Image Text:5. In the following diagram D€ is the US demand curve for Euro and S€ is the US supply
curve for Euro. If the exchange rate of Euro is US$1.5/€ then which of the following is true.
$/€
1.5
D€
LO
5
10
14
Se
A)
B)
US has a balance of trade deficit of 4 billion Euro
US has a balance of trade surplus of 5 billion Euro
US has a balance of trade deficit of 2 billion Euro
C)
D)
US has a balance of trade surplus of 9 billion Euro
Answer:
Q€ (billions)
Transcribed Image Text:6. The price elasticity of the US demand for imports in euros is given by:
E) the percentage change in the quantity demanded of imports by US consumers
divided by the percentage change in the quantity demanded of US exports by European
consumers
F) the percentage change in the quantity demanded of imports by US consumers
divided by the percentage change in the price of the US imports in euros
G) the percentage change in the quantity demanded of US exports by European
consumers divided by the percentage change in the quantity demanded of imports by US
consumers
H) the percentage change in the price of European exports divided by the percentage
change in the price of the US imports in euros.
Answer:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc