Explain what is "Dumping"? Explain how the use of tariffs and quotas by a country affect its imports and balance of trade, and current account, assuming all else kept constant. Chapter 2, Question 13. Exchange Rate Effects on Trade Explain why a stronger dollar could enlarge the U.S. balance-of-trade deficit. Explain why a weaker dollar could affect the U.S. balance-of-trade deficit. It is sometimes suggested that a floating exchange rate will adjust to reduce or eliminate any current account deficit. Explain why this adjustment would occur. Why does the exchange rate not always adjust to a current account deficit? Explain the "J curve" effect