Unit 5 Problem Set Rubric

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Presentation transcript:

Unit 5 Problem Set Rubric

Question #1

Question 1 Question A: 5 Points Question B: 5 Point Total 2 Point- Definition of Trade Deficit 2 Points-Definition of Trade Surplus 1 Point- Examples Question B: 5 Point Total 2 Point- Definition of Current Account 2 Points-Definition of Financial Account Question C: 5 Point Total 2 Point- Definition of Appreciation 2 Points-Definition of Depreciation

Question #2 International Trade

Question2 Question A: 5 Points Question B: 5 Point Total 1 Point- To figure it up we add all transactions of goods and services 1 Point- US has a Trade Deficit 1 Point- China has a Trade Surplus 1 Point- US trade deficit is -$500 1 Point- China trade surplus is +$500 Question B: 5 Point Total 2 Point- US current account deficit is -600 2 Point- Chinese current account surplus is +600 1 Point- Add up all the trade of goods and services, foreign aid, and purchases by tourists.

Question2 Question C: 5 Points 2 Points- Chinese government is holding $200 of US bonds 1 Point- The US has a current account deficit of negative 600 so they need financial account surplus of +600. 1 Point- Inflows in US are greater than outflow 1 Point- Inflow in China is less than outflow

Question2 Question D: 5 Points 1 Point- Chinese will buy cheaper American products 1 Point- Chinese current account will move towards a deficit 1 Point- The US current account will move towards a surplus 1 Point- US Dollar Appreciate 1 Point- Chinese Currency Depreciate

Question2 Question E: 5 Points 1 Point- Americans will seek higher Chinese interest rates 1 Point- Chinese financial account will move towards a surplus as inflows increase 1 Point- The US financial account will move towards a deficit as outflows increase 1 Point- US Dollar Depreciate 1 Point- Chinese Currency Appreciate

Question #3 FRQs