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I Why Does the United States Both Import and Export

question 159

Essay

I. Why does the United States both import and export ethanol?
II. Suppose that the United States allowed domestic fuel producers to use ethanol made from any source (i.e., corn or sugar). What is likely to happen to U.S. production of corn ethanol and U.S. imports of sugar ethanol?


Definitions:

Fiscal Policy

Government adjustments to its spending levels and tax rates to influence a nation's economy.

Lag

Lag refers to a delay that occurs between the cause and effect of an economic policy or other measured variable in the analysis of data.

Income Effect

The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.

Substitution Effect

The change in quantity demanded resulting from a change in the price of a good, making other goods more or less expensive relative.

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