week 11 notes
Popular in Introductory Macroeconomic Analysis and Policy
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This 1 page Class Notes was uploaded by Julia Staltari on Friday April 3, 2015. The Class Notes belongs to ECON 104 at Pennsylvania State University taught by Adrienne Kearny in Spring2015. Since its upload, it has received 46 views.
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Date Created: 04/03/15
0 O OIIOOOOOOOOO 0 Exam 3 government expenditures autonomous as a component of AD usually not related to the economy except in recession when G increases AD increases Net exports as a component of AD NX exports X lmports M gt typically negative bc we import more than we export NX are usually affected by the business cycle bc spending is affected by the cycle today NX are falling bc of the strong dollar In a US disinflation deflation goods are relatively cheaper increase in exports decrease in imports gt O NX and relative growth in RGDP national income o change RGDPus lt o change RGDProw NXUS increase in exports decrease in imports recession in US our income is rising slower than our trading partners ROW was doing great until recession spread Usually dollar depreciates during recession bc of a decrease in investment and demand for the dollar NX and the relative value of the US dollar ex If the dollar depreciates the yen appreciatesstrengthens bc one US dollar is now worth less yen s so they have more purchasing power US exports increase gt NX increases US imports decrease and foreign goods become more expensive to americans recession of 20072009 the dollar got stronger for some reason Japan is our third largest trading partner Yen Price dollar price x Eyendollar Recession of US NX usually increase decrease in NX left shift