Hey there I need help with the follwing 4 question from my m

Hey there I need help with the follwing 4 question from my macroeconomic classes !

Best

If the US economy goes into a recession but growth remains at a positive constant rate or the eurozone countries (e.g 2.5%) holding everything else constant we can expect: No change in the demand for U.S. exports and constant U.S. net exports. OAn increase in the demand for European imports and a decrease in U.S. net exports. A decrease in the demand for European imports and an increase in U.S. net exports. An increase in the demand for U.S. exports to Europe and an increase in U.S. net exports. Save uestion 12 (3 points) Following the answer from the previous question we can expect (holding everything else constant): A decrease in the supply of dollars in the foreign exchange market and an appreciation of the dollar in relation to the euro o An increase in the demand for dollars in the foreign exchange market and an appreciation of the dollar in relation to the A decrease in the demand for dollars in the foreign exchange market and a depreciation of the dollar in relation to the euro

Solution

- a decrease in demand for US imports and increase in net exports.

Since the growth rate is constant, demand for US exports does not rise. Demand for European goods decreases due to decrease in US income which happens when market goes into recession.

- A decrease in the supply of dollars in the foreign exchange market and appreciation of dollar in relation to euro.

Decrease in demand for imports reduces supply of dollars. Decrease in supply of dollars increases value of dollar leading to appreciation of dollar.

- A decrease in dollar price of imports and increase in euro price of US exports.

Appreciation of dollar increases dollar value and decreases euro value.

- An increase in imports and decrease in US exports resulting in decrease in net exports.

Appreciation of dollar reduces demand for US exports and increases demand for euro imports which reduces net exports.