Answered: (a) Distinguish between a government…

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(a) Distinguish between a government deficit and trade deficit?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 33CTQ: A government official announces a new policy. The country wishes to eliminate its trade deficit, but...

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Question 2
(a) Distinguish between a government deficit and trade deficit?
(b) Would you rather live in a nation with a with a high per capita GDP and a low growth
rate, or in a nation with a low per capita GDP and a high growth rate?
(c) Briefly explain the quantity theory of money and how it is related to inflation

Definition Definition Situation in which a country spends more on imports than it makes through exports. When a trade deficit exists, net exports will be negative. Trade Deficit = (Imports) - (Exports)

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