Problems & Exercises for MACRO

Unit Four (for the Final Exam)

Unit Four--Assignment Two--Web Problem 1

If the U.S. economy slides into a recession, then what is likely to happen to the U.S. trade balance with Canada, and why? Deal with both exports and imports. Assume the Canadian economy stays the same.

If the U.S. economy grew rapidly and moved toward the top of the business cycle, then what would happen to the U.S. trade balance with Canada, and why? Address both exports and imports. Again, assume no change in the Canadian economy.

Please send your responses by e-mail.