Question
2.(10points)Inthedata,thetradedeficitappearstobeprocyclical(takethisasastatementoffact).Definewhatismeantbyatradedeficitandbythetradedeficitexhibitingprocyclicalbehavior.Usingoneoftheopeneconomymodelsstudied,useadiagramtooutlineapossibleexplanationfortheprocyclicalbehaviorofthetradedeficit.Note:youmayincludeabriefexplanationtoaccompanyyourdiagramtodetailthemechanismbywhichweareabletoobtainaprocyclicaltradedeficit.
2.(10points)Inthedata,thetradedeficitappearstobeprocyclical(takethisasastatementoffact).Definewhatismeantbyatradedeficitandbythetradedeficitexhibitingprocyclicalbehavior.Usingoneoftheopeneconomymodelsstudied,useadiagramtooutlineapossibleexplanationfortheprocyclicalbehaviorofthetradedeficit.Note:youmayincludeabriefexplanationtoaccompanyyourdiagramtodetailthemechanismbywhichweareabletoobtainaprocyclicaltradedeficit.
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Economics of Strategy
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
6th edition
