14. A number of factors can influence a country\'s trade balance. For each of th

Question

14. A number of factors can influence a country's trade balance. For each of the following, indicate how it would affect the count country's exports and its imports. In each box, write Sncrease", "decrease", or "no effect", depending how you think imports and exports would change as a result. For example, stronger demand for a country's exports will increase exports, but have no effeet on imports. (Note: the question is asking how the given factors affect trade, not how trade affects those factors; 6 points) Exports Imports Stronger demand for country's exports increase The country has high inflation The country has high GDP growth The country's currency appreciates no effect

Explanation / Answer

Exports

Imports

Stronger demand for country’s exports

increase

No effect

The country has high inflation

decrease

No effect ( may decrease also)

The country has high GDP growth

Increase

decrease

The country’s currency appreciates

decrease

increase

The country imposes high tariffs

increase

Decrease

Exports

Imports

Stronger demand for country’s exports

increase

No effect

The country has high inflation

decrease

No effect ( may decrease also)

The country has high GDP growth

Increase

decrease

The country’s currency appreciates

decrease

increase

The country imposes high tariffs

increase

Decrease

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