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Macroeconomics (9th Edition)
9th Edition
ISBN: 9780134167398
Author: Andrew B. Abel, Ben Bernanke, Dean Croushore
Publisher: PEARSON
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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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How do government budget deficits affect the exchange rate and trade balance?
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Chapter 5 Solutions
Macroeconomics (9th Edition)
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Similar questions
- Explain the relationship between a current account deficit or surplus and the flow of funds.arrow_forwardWhat does it mean by "monetary and fiscal policies in a closed economy" when pertaining to macroeconomic policy in an open economy?arrow_forwardWhy does a recession cause a trade deficit to increase?arrow_forward
- What is current account deficit? List down, with detailed explanations, what causes current account deficit in the economy.arrow_forwardWhat do the terms internal balance and external balance mean in open-economy macroeconomics?arrow_forwardWhat does it mean by "aggregate demand and aggregate supply" when pertaining to macroeconomic policy in an open economy?arrow_forward
- why is the recovery of global economy, especially the Euro Zone, so important to the South African Economy.arrow_forwardExplain and illustrate with a diagram how a country’s current account deficit might cause a change in the external value of its currencyarrow_forwardWhat does symmetrical adjustment of current account imbalances mean?arrow_forward
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