Which country is more sensitive to changes in its exports

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Reference no: EM13210288

Recently there have been several news talking about the slowdown of production (and productivity) in south-east Asia (especially China). Answer the following questions under the following assumptions: there are only two regions in the world; the U.S and China, the U.S. is net importer (therefore is more sensitive to changes in its imports), China is net exporter (therefore is more sensitive to changes in its exports), both countries are of similar economic size and also assume there is an important decrease in production in China but that this decrease doesn't eliminate trade between the two economies (it affects them but doesn't eliminate them).

a. Assume that another region (country) enters the picture. Also, assume that this new country is as big as the U.S. and China and that it is experiencing an economic boom with high levels of imports and exports. What will happen to your answer to a) under this assumptions?

Reference no: EM13210288

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