Question

2. It appears that the US’s net exports have been negative for decades.

a. Explain the potential positive effects this might have on the US consumer.

b. Explain the potential negative effects this could have on US producers.

Answer 1

A) Explain the potential positive effects this might have upon the US consumer.

The potential positive effects of the U.S. net exports having been negative for decades are that the US consumers are able to purchase foreign and domestic goods and services. The consumers are able to enjoy both international imports as well as lower priced local goods.

b) Explain the potential negative effects this could have upon US producers.

The potential negative effects this could have upon US producers is that the domestic US producers are having to sell their goods at lower prices, in order to keep up with the competition from now foreign imported goods at higher prices.