Complete the following six questions: use specific examples to support your answers.
1. If exports increase and imports decrease in the U.S., what happens to the trade deficit? Will this help or hurt the U.S.? In what ways is a bigger trade deficit a problem for the country? What good is the deficit? Hint: Use the currency market supply and demand to determine the exchange rate.
2. In what ways is the trade between countries increasing? Is trade good or bad for U.S.? What is the alternative to trade? What kind of lifestyle will the US have if the alternative is adopted? Is it a viable alternative to trade? Be specific
3. If there is increase in U.S. tourism and an increase in U.S. interest rates, what will happen to the U.S. dollar compared to other currencies in the foreign exchange market? Use the supply and demand graph to determine the answer. Explain your answer based on the graph.
4. In the future, based on the opportunity cost for the U.S. workers, companies, and resources, what type of products or services will the country produce? What will continue to make the U.S. richer in the future? Consider U.S. resources and how they can best be used.
5. If the exchange rate between US and Iceland is 1 U.S. dollar for 100 Iceland Krona, the U.S. economy is stronger than the Icelandic economy, and U.S. consumers have 100 times more buying power in Icelandic consumers. Do you agree or disagree with the statement.
6. Pick One country (except for the US) and identify the following information for that country: What is the countrys currency, the exchange rate to the USD, GDP (nominal or Real), GDP per capita, Quality of Life index ranking, major exports and imports.