Trade Deficits and J-Curve Adjustment Paths

Assume the United States has the following import/export volumes 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 $/fc	1.97
Price of exports, dollars ($)	19.1200
Price of imports, foreign currency (fc)	12.6800
Quantity of exports, units	120
Quantity of imports, units	140
Percentage devaluation of the dollar	19.00

What is the pre-devaluation trade balance?

- Revenues from exports are $ _____ (Round to the nearest cent)

- Expenditures on imports in foreign currency are fc ______ (Round to two decimal places)

- The expenditures on imports in the U.S Dollars are $____ (Round to nearest cent)

Pre-devaluation trade balance:

Revenues from exports, US Dollars : _____ $

Expenditures on imports, foreign currency: _____ fc

Expenditures on imports, US Dollars: _____$

Pre-devaluation trade balance: _____ $

- New spot exchange rate after devaluation is $____/fc ( Round to 4 decimal places)

- New expenditures on impots in US Dollar are $_____ (Round to the nearest cent)