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What factors have been affecting EU/US trade Flows during the past decade?

What factors have been affecting EU/US trade Flows during the past decade?

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Answer #1

The factors that US/EU Trade flows are as follows:

1. National income:

It depends on the income of the residents. If they earn more they will spend more on imports.

2. Inflation:

If there is inflation in home country, they would prefer importing as that would be cheaper.

3. Deflation:

If there is deflation in home country, they would prefer exporting more as that is more profitable.

4. Trade restriction caused by government regulations:

Sometimes in order to protect home country, government puts trade barriers which will reduce exports.

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