(Answered) Trade balance and exchange ratesa balance of trade trade

Management Studies

Trade Balance and Exchange Rates

A balance of trade (trade balance) is the difference between the monetary values of exports and imports of a country's economic output over a given period of time.

Trade balance can be positive (favorable) when the value of exports is greater than the value of imports. The positive trade balance is also called trade surplus. On the other hand, if the value of imports is greater than the value of exports, the trade balance indicates trade deficit.

Trade balance affects the Gross Domestic Product (GDP) of a country because net export is a component of the GDP. Recall GDP = C + I + G + Nx

Trade balance also affects the exchange rate of a country's currency. Supply and demand for foreign currency result in changing prices of a currency.

The price of a currency changes as demand for a foreign currency changes.

Is it trade deficit or trade surplus that contributes more to economic growth? Why?

What are the factors that increase and decrease the demand for a foreign currency?

What are the impacts of currency devaluation and revaluation on international trade?

What is currency war? How does it affect trade between countries?

needs tp be 300 words

View complete question

Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92781956
Price:- $20

Verified Expert

Priced at $40 Now at $20, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Operation Management

A homeowner hires a contractor to tile five identical rooms

A homeowner hires a contractor to tile five identical rooms in her home. She purchased the tiles. The contractor is only being paid for his labor. Because the tiles are unusually shaped and hard to install, he assumes tw ...

1 which of the following statements are true regarding cost

1. Which of the following statements are true regarding cost estimating techniques? 1) Bottom up estimating is a technique that uses statistical relationship between historical data and other variables to calculate a cos ...

1 discuss how you would change a training program if you

1. Discuss how you would change a training program if you were in charge of the program and it had proven not to be effective. 2. Discuss the technology you would use in the ‘new and improved’ training program. 3. Why wo ...

A multi-level bill of materiali reflects the components

A multi-level bill of material: I. Reflects the components through which the product will be manufactured. II. Is produced by the engineering department. III. Is a parts list only and does not contain subassemblies. a. o ...

This activity is important because marketers should

This activity is important because marketers should understand that marketing communications experts broadly categorize their media investments across three categories: (1) paid, (2) owned, and (3) earned media. Luke rec ...

1 what form should be used to identify clientrsquos

1. What form should be used to identify client’s expectations and objectives? Discuss in 50 to 80 words. 2. Why is agency law essential to the existence and operation of a corporation? 3. Certainly not all Gen Xers, baby ...

There are generally three methods used for evaluating jobs

There are generally three methods used for evaluating jobs: 1.Ranking. 2.Classification. 3.Point method. Prepare a short description of each method, including your responses to the following: • What are the main features ...

Hennys chocolates is well known for producing only one type

Henny's Chocolates is well known for producing only one type of handmade chocolate and the unit price is $40. The annual demand is 5,000 chocolates on average and the expected inventory holding cost is 10% of the cost of ...

1 why are the standards the property of the franchisor and

1. Why are the "Standards" the property of the Franchisor and not the Franchisee? 2. How can related diversification create a competitive advantage for the organization? 3. Describe how "globalization" connects with some ...

A construction company is creating a quantitative model for

A construction company is creating a quantitative model for use in bidding on new projects. The company has identified the following variables to include in the model. Whether or not to submit a bid (yes/no) The amount o ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Operation Management Expert