Evaluating the Impact of Trade on the Macroeconomy

The video tutorial explores the macroeconomic concept of trade, focusing on the impact of AD and SRAS curve shifts on the current account and net exports. It discusses how changes in macroeconomic equilibrium affect real output and price levels, influencing trade competitiveness. The tutorial evaluates the size and factors of AD curve shifts, considering assumptions like ceteris paribus and exchange rate impacts. It also examines the role of LRAS curve shifts, highlighting productivity gains and their effects on trade. The session concludes with a preview of monetary policy evaluation.

What role does the exchange rate play in the context of net exports?

How can the elasticity of demand for imports and exports affect trade?

Explain how a shift in the LRAS curve can influence the overall economy.