Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 14, Problem 2QR
To determine

Why the budget deficits and the trade deficits are called twin deficits.

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Why are budget deficits and trade deficits sometimescalled the twin deficits?
If there is no trade deficit, budget deficit =$500, what is the difference between savings and planned investment in equilibrium?
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?
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