Macroeconomics (9th Global Edition)
9th Edition
ISBN: 9780134141534
Author: Andrew B. Abel, Ben Bernanke
Publisher: Pearson Global Edition
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Question
Chapter 5, Problem 9RQ
To determine
To analyze:Effects of an increase in government budget deficit on current account balance. The amount of change in the current account balance. Connection between government budget deficit and the current account balance.
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Find the current account balance when the trade balance are 2,81,000 and the invisible balance are 3,91,000 in the circular flow of income?
A trade balance can be quickly defined as the gap between ___________ , which are also included in the current account balance along with ___________ .
a) supply and demand; stocks and bonds
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c) exports and imports; investment income and unilateral transfers
d) supply and demand; investment income and unilateral transfers
Explain why a nation with a current account deficit is a net external borrower, while a nation with a current account surplus is a net external lender.
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Macroeconomics (9th Global Edition)
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