Why Is Time a Factor in Making the Trade Balance

question 37

Essay

Why is time a factor in making the trade balance worsen after a depreciation? What impact does the elasticity of exports and imports have on the eventual improvement in the balance of trade as more time passes?

---

Definitions:

Economic Profits

Profits exceeding the total opportunity costs of all resources used in production; also known as abnormal or supernormal profits.

Hired Managers

Individuals employed to direct and control the operations, strategies, and policies of a business or organization.

Marginal Revenue Product

The additional revenue generated from using one more unit of a factor of production.

Different Rents

Variations in rental prices, often influenced by factors such as location, demand, and property features.