I only need help on 4A please sert Design Layout References

sert Design Layout References Mailings Review View + Sha Times New R 12 A^ A A. Style 4. The chapter notes that the rise in the U.S. trade deficit during the 1980s was due largely to the rise in the U.S. budget deficit. On the other hand, the popular press sometimes claims that the increased trade deficit resulted from a decline in the quality of U.S. products relative to foreign products. a. (1 point) Assume that U.S. products did decline in relative quality during the 1980s. How did this affect net exports at any given exchange rate? (3 points) Draw a three-panel diagram to show the effect of this shift in net exports on the U.S. real exchange rate and trade balance. b. The shift in net exports on the U.S. real exchange rate and trade balance can be seen in the following diagram. (I ended up hand drawing these diagrams in order to accurately show the shifts.)

Solution

4a.When the quality of any product declines,it\'s demand falls.People substitute the low quality product with the high quality product.Due to lower demand of the product,the export falls.

The net exports therefore falls as a result of poor quality products.