Transcript CHAPTER 14 FIGURES

Chapter
TwentyNine:
The Global
Economy and
Policy
Macroeconomics in a Global
Context
Figure 29.1: Trade Expressed as a Percentage of
Production, World and the United States, 1960-2010
70
Trade as a Percent of GDP
60
World
50
40
United States
30
20
10
0
1960
1970
Source: World Development Indicators, World Bank, 2012.
1980
1990
2000
2010
Figure 29.2: Top Purchasers of Goods from the United
States and Suppliers of Goods to the United States, 2012
Buyers of U.S. Exports
Mexico
Japan
Germany
South Korea
0
50
100
150
200
250
300
350
Billions of Dollars
Sellers of Imports to the U.S.
Canada
Japan
South Korea
United Kingdom
0
100
200
300
Billions of Dollars
Source: U.S. Census Bureau, Foreign Trade Statistics, Top Trading Partners, 2012.
400
500
The Trade Balance: Completing
the Picture
Figure 29.3: Leakages and Injections in a
Complete Macroeconomic Model
Output (Y)
Production
generates
income to
households
Income (Y)
leakages
Taxes (T)
Savings (S)
Consumption (C)
Spending (AD)
Imports (IM)
injections
Intended investment (II)
Government spending
(G)
Exports (X)
International Finance
Figure 29.4: A Foreign Exchange Market
Euros per Dollar
S
E
D
Quantity of Dollars
Euros per Dollar
Figure 29.5: A Supply Shift in a Foreign Exchange
Market
S1
S2
E1
Depreciation
of the Dollar
E2
D
Quantity of Dollars
Table 29.1: U.S. Balance of Payments Account
(2011, billions of dollars)
Source: U.S. Bureau of Economic Analysis, U.S. International Transactions Accounts Data, table 1, with rearrangements and simplifications by authors.
*Also includes the net value of financial derivatives (financial instruments whose values are linkedto an underlying asset, interest rate, or index, such as futures
or options).
Figure 29.6: U.S. Imports and Exports of Goods
and Services, 1960-2012
20%
18%
16%
Percent of GDP
14%
12%
10%
8%
6%
4%
Exports as % of
GDP
Imports as % of
GDP
2%
0%
1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012
Source: BEA NIPA Tables 4.1 and 1.1.5
Macroeconomics in an Open
Economy
Expansionary
monetary policy
Lowers
interest rates
Reduces
capital inflows
Investment is
encouraged
Reduces
demand for
dollars, leading
to depreciation
Aggregate
demand rises
Reduces imports
and increases
exports
Equilibrium
GDP rises
Per Unit of Domestic Currency
Units of Foreign Exchange
Figure 29.7: Foreign Exchange Intervention
Surplus
without
intervention
Smarket
e*
Dwith intervention
Dmarket
Quantity of the Domestic
Currency