Problem 3-25 (algorithmic)

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Trade Deficits and J-Curve Adjustment

Paths.

Assume the United States has the following import/exportvolumes and prices. It undertakes a major "devaluation" of the dollar, say

19%

on average against all major trading

partner currencies. What is the pre-devaluation and post-devaluation trade balance?

Initial spot exchange rate, $/fc	1.95
Price of exports, dollars ($)	20.7900
Price of imports, foreign currency (fc)	13.2100
Quantity of exports, units	130
Quantity of imports, units	150
Percentage devaluation of the dollar	19.00

What is the pre-devaluation trade balance?

The revenues from exports are

$nothing.

(Round to the nearest cent.)