Economics class: German gloom deepens as Trump tariff threat rattles exporters

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Specification:

• Trade, protection, exchange rates, price elasticity of demand

Click to read the article and then answer the questions:

German gloom deepens as Trump tariff threat rattles exporters

• Identify the three pillars of Germany’s postwar economic miracle

• Identify three factors contributing to Germany’s current economic malaise

• Identify two reasons why the US has become Germany’s most important trading partner

• With reference to the chart, compare Germany’s trade surplus with the US during the period shown

• Define price elasticity of demand

• “In a scenario where Trump introduces the 20 per cent tariffs on non-Chinese imports … German exports to the US could tumble by 15 per cent.” Using a diagram, analyse the US’ price elasticity of demand for German exports

• With regard to trade protection, define i) trade creation; and ii) trade diversion

• Using an exchange rate diagram, analyse how a strengthening of the USD against the euro could work to Germany’s advantage

Gavin Clarke, Emmanuel College