Which of the following may not be associated with a deficit? Select one: a. A need to increase borrowings b. Less foreign investment In the deficit economy c. Increased imports d. Lesser capital inflows e. Increased exports
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- Describe how a plan for reducing the government deficit might affect a college student, a young professional, and a middle-income family.When is a trade deficit likely to work out well for an economy? When is it likely to work out poorly?Under what conditions will a larger budget deficit cause a trade deficit?
- Sketch a diagram of how a budget deficit causes a trade deficit. (Hint: Begin with what will happen to the exchange rate when foreigners demand more U.S. government debt.)What is a foreign trade deficit or surplus? How does this affectinterest rates?1. Assume that the gross domestic product is $6,000, personal disposal income is $5,100, thegovernment deficit is $200, consumption is $3,800, and the trade deficit is $100. What is the sizeof:a. Private Savingb. Investmentc. Government Spendingd. National Savingse. Taxesf. Public savings
- Explain how current account and budget deficit (twin deficit) are related so that changes in one are reflected in changes in the other .Explain.Generally, how does the standard of living in the United States today compare to the standard of living in other countries? To the standard of living in the United States a century ago?The Bureau of Economic Analysis, or BEA, is a government agency collecting various U.S. economy statistics. From the BEA’s website, find data for the most recent year available on U.S. exports and imports of goods and services. Is the United States running a trade surplus or deficit? Calculate the ratio of the surplus or deficit to U.S. exports.There are many people out there providing opinions on the economy. How can differences of opinion about economic policy recommendations be resolved?The us government has shutdown a number of times in recent history. Explain how a government shutdown will affect the variables inthe national investment and savings identity. Could the shut down affect the governement budge deficit?
- During the Great Recession there was a large drop in the US trade deficit. There was also a large increase in the US government budget deficit. Are these two facts related? What else must be going on to have a falling trade deficit and a growing government budget deficit at the same time?1) In a closed economy, investment cannot be equal to private savings.A) TrueB) False 2)A rise in risk premium will cause bond market prices to rise.A) TrueB) False 3)If the government is running a budget deficit and private saving is less than investment, thecountry must be running a trade deficit at equilibrium.A) TrueB) FalseIf consumption is $12 billion, investment is $5 billion, government purchases are $6 billion, exports are $3 billion, and imports are $5 billion, calculate GDP. (Do not include the dollar sign or billion in your answer. So, if your answer is $35 billion, just write in 35 ) is there a trade surplus or deficit?