Trade Deficits and J-Curve Adjustment Paths. Assume the United States has the following import/export volumes and prices. It undertakes a major "devaluation" of the dollar, say 16 % on average against all major trading partner currencies. What is the pre-devaluation and post-devaluation trade balance? Initial spot exchange rate, $/fc 2.06 Price of exports, dollars ($) 19.1800 Price of imports, foreign currency (fc) 10.5400 Quantity of exports, units 100 Quantity of imports, units 120 Percentage devaluation of the dollar 16.00

Suppose that the u.s. dollars-mexican pesos exchange rate is fixed by the u.s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs.which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u.s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u.s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u.s. dollars.