Internation Economic Essay Example | Topics and Well Written Essays - 500 words

Internation Economic - Essay Example 4.The United states has experienced a Balance of payment Trade deficit since 1982. You are a member of the Council of economic advisers to President and you role is to advise the President, who is very concerned about the rising EURO and the Trade Deficit, on how he can reduce or correct the Trade deficit respond to the Euro. What actions would you recommend and why? The US trade deficit shows that the country is importing more than its exports. Any act of balancing the trade deficit through increased exports that match with the imports will take years to yield the desired results. One of the easiest ways to ease out is through favorable changes in the currency exchange rates such as the Euro. A rising euro means that the United States is able to export more than previous levels. As such, the trade deficit has come down since 1996 compared to previous years. Therefore, it is advised to maintain the favorable variations in currency by looking into the factors that affect these exchange rates and utilizing them for the benefit of the