Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 19, Problem 1RQ
To determine
Explain the trade based on daily activities.
Expert Solution & Answer
Explanation of Solution
If a room contains more foreign goods, it implies that the country has more import. If a room contains more domestically produced goods, it implies that the country has more export than imports. If the export is greater than imports, it will lead to an increase in the inflow of currency in the country and result in an increase in the value of currency. The increased value of currency will result in appreciation of currency.
If the import is greater than the export, it will lead to an increase in the outflow of currency in the country and will result in a reduction of the value of currency. The decreased value of currency will result in a
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Chapter 19 Solutions
Macroeconomics (Fourth Edition)
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