Question
In 2021, Nation Z exported 10,000 pounds of Olives at $90 per pound and imported 9 military tanks at $75,000 per tank. In 2022, due
In 2021, Nation Z exported 10,000 pounds of Olives at $90 per pound and imported 9 military tanks at $75,000 per tank. In 2022, due to rising international conflict, Nation Z exported 9,000 pounds of olives at $180 per pound. Nation Z imported one more military tank, while the price of tanks doubled.
A- In nominal terms, what was Nation Z trade balance (X-M) in 2021? What was it in 2022?
B- What was the nominal rate of growth of the trade balance?
C- Suppose we use 2021 prices as the base. What was the real trade balance in 2022? What was the rate of growth of the real trade balance?
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