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Suppose the United States produces and exports machines to Canada, and Canada produces and exports wheat to the United States. To keep things simple, we

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Suppose the United States produces and exports machines to Canada, and Canada produces and exports wheat to the United States. To keep things simple, we will consider only these two countries trading only these two goods. In 2019, the price of machine shipped from the United States was $1 milion per unit and the US was exporting 4.000 units per year to Canada. Also, the price of wheat from Canada in the US market was $2 per unit, and Canada exported 3 billion units to the United States Now, suppose there is a 10% depreciation of the US Dollar from 2019 to 2000, the export alasticity of machine change in quantity of US export/% change in the price in Canada 15, and the import elasticity of Wheat ( change in quantity of Us import/% charge in the price in USA) is 0.8. Compute the value of the new US trade balance in 2020

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