AP Macro Unit 5 Summary

Practice1. U.S. income increases relative to other countries. Doesthe balance of payments move toward a deficit or asurplus?- Imports are cheaper- Americans import more- Net exports (X n ) decrease- The current account balance decreases and movestoward a deficit.2. If the U.S. dollar depreciates relative to othercountries does the balance of payments move toward adeficit or a surplus?- US exports are desirable- America exports more- Net exports (X n ) increase- The current account balance decreases and movestoward a surplus.