A If Corporate Downsizing and Lack of Job Security Cause

question 20

Essay

a. If corporate downsizing and lack of job security cause consumers to spend less and save
more, what will be the impact on the exchange rate and trade balance? Use the long-run
model of a small open economy to illustrate graphically the impact of this decline in
consumer confidence on the exchange rate and the trade balance. Assume the country starts
from a position of trade balance, i.e, exports equal imports. Be sure to label:
i. the axes
ii the curves
iii. the initial equilibrium values
iv. the direction the curves shift
v. the new Long-run equilibrium values

b. Based on your graphical analysis, explain the predicted impact of a decline in consumer
confidence on the exchange rate and the U.S. trade balance.

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Definitions:

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification of officially recognized psychiatric disorders, published by the American Psychiatric Association.

Other Specified Feeding Or Eating Disorder

Presentations of an eating disorder that cause clinically significant distress or impairment but do not meet the full diagnostic criteria for any of the eating disorders otherwise identified.

Diagnosable Psychiatric Disorder

A mental disorder that meets standardized criteria set forth in diagnostic manuals such as the DSM or ICD, making it officially recognizable by professionals.

Partial-syndrome Eating Disorders

Eating disorders that do not meet the full criteria for disorders like anorexia or bulimia yet still present significant health risks.