Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 36, Problem 2TY
To determine
Explain the common sense behind the version of the fundamental equation.
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Chapter 36 Solutions
Economics: Principles & Policy
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- If a country has a trade deficit of $30 billion, which of the following can be true? Group of answer choices The country's exports are $150 billion and its imports are $120 billion. The country's exports are $110 billion and its imports are $140 billion. The country's exports are $140 billion and its imports are $40 billion. The country's exports are $120 billion and its imports are $140 billion.arrow_forwardYou have the following annual figures for the New Zealand economy. Investment expenditure $42.5 billion Government savings -$1.7 billion Many politicians and commentators would like to see continued increases in investment and current account surpluses rather than deficits. If these events are to occur, what else must be happening in the economy? 1. The Government must raise the retirement age. 2. Government spending must fall 3. National savings (private and government) must rise 4. New Zealand must restrict foreign ownership of land and other assetsarrow_forwardThe data in Table 12-1 end in 2011. Visit the U.S. Bureau of Economic Analysis at bea.gov to find information for the latest full calendar year (or for the last four quarters). What is the latest estimate of the size of the annual U.S. current account deficit in billions of dollars?arrow_forward
- Which of the following economic reasoning behind the twin deficit theory is not correct?a. According to the national income accounting, if private saving and investment stay constant, a government budget deficit can cause a trade deficit by reducing national saving. b. Government budget deficits (due to expansionary fiscal policy) and trade deficits during the 1980s and early 2000s in the US are the cases of the twin deficits.c. The chain of causality can work in a reverse way: a smaller fiscal deficit leads to a smaller trade deficit, other things being equal.d. All of the above are correct.arrow_forwardThe following table contains hypothetical data for Canada's balance of payments in a particular year. Exports of goods and services $160 Imports of goods and services $140 Primary income (investment income received from abroad) $15 Primary income (investment income paid from abroad) $25 Secondary income (Net transfers) $10 Foreign investment in Canada $220 Canadian investment abroad $240 Refer to the information above to answer this question. Which of the following reflects the state of Canada's capital account? Multiple Choice It has a deficit of $10 billion. It has a deficit of $20 billion. It has a surplus of $5 billion. It has a surplus of $30 billion.arrow_forwardAssume the gross domestic product is $6,000 personal disposal income is $5,100, the government deficit is $200, consumption is $3,800 and the trade deficit is $100. What is the size of: Private savings Investment Government spending National savings Taxes Public savingsarrow_forward
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