The U.S. has the largest trade deficit with China. How will a ban on trade with China affect the current account of the U.S.?
What will be an ideal response?
Ending all trade with China might do little to the overall U.S. trade deficit. It depends upon whether the purchases that the United States made from China simply shift to other foreign suppliers of the same kinds of goods, for example Vietnam. In fact, lots of developing countries now produce the manufactured goods that the US currently imports from China. If U.S. consumers switched their purchases of Chinese exports to other foreign countries, the overall U.S. trade deficit may not change at all. In other words, the U.S. trade deficit has a lot to do with the decisions of U.S. consumers, and relatively little to do with the particular trading partners from whom they buy laptops and printers.
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Indicate whether the statement is true or false
Which of the following is an example of a normative statement?
A. The American Recovery and Reinvestment Act should not have been passed during the Great Recession. B. Unemployment soared to 25 percent during the Great Depression. C. An increase in alcohol taxes will reduce the number of drunk driving accidents. D. Great Britain has fewer hospital beds per capita today than they did in 1948.
The GDP per capita of the U.S. economy is larger than the GDP per capita of Germany, which proves that the standard of living in the United States is higher than in Germany.
Select whether the statement is true or false. A. True B. False
New residential housing is counted in GDP as
a. a durable consumption good. b. a household durable good. c. an investment good. d. an inventory expansion. e. a long-term durable good.