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Implications for foreign trade

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Given the state of our economy today and currently monetary and fiscal policy, what are the implications for foreign trade?

Is this a good or bad situation?

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Solution Summary

The current state of US economy is poor due to the fact that US current deficits are increasing day by day.

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The current state of US economy is poor due to the fact that US current deficits are increasing day by day and dollar is weakening with respect to global currrencies like Euro and British Pounds. The Federal Open Market Committe has been continuously increasing the interest rate to stmulate growth in the economy by 25 basis points each quarter which had gone down to historic lows. Such rate hikes in the interest rates have slowed down the outflow of money for investment in emerging countries like China and India to some extent, but there still seems to be long time when the current ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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