Hello, thank you for your help!!! Suppose the fictional country of Nevicia is un

Question

Hello, thank you for your help!!!

Suppose the fictional country of Nevicia is under pressure from its trading partners to decrease its trade surplus. Which of the following would help decrease Nevicia's trade surplus? Check all that apply. Encouraging the economy of Nevicia to grow more quickly than the economies of Nevicia's trading partners Decreasing taxation while holding government expenditures, saving, and investment constant True or False: If the government of Nevicia lowers its trade surplus by repealing tariffs, Nevicia can expect, in addition to an increase in imports, changes in either the government deficit, the gap between saving and investment, or both. True False

Explanation / Answer

Decreased taxation (when government spending, consumption and investment are constant) will attract more imports as imports will now be cheaper so it will reduce trade surplus as balance of trade = exports - imports

True: tariffs will definetly decrease government earning as tax and tariffs constitutes majority of government earning so government deficit. As tariff go down consuption will increase and saving will decrease, increasing the gap between saving and investment.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.