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- Table 23.7 provides some hypothetical data on macroeconomic accounts for three countries represented by A. B, and C and measured in billions of currency units. In Table 23.7, private household saving is SH, tax revenue is T, government spending is G, and investment spending is Calculate the trade balance and the net inflow of foreign saving for each country. State whether each one has a trade surplus or deficit (or balanced trade). State whether each is a net lender or borrower internationally and explain.Net exports and net capital outflow: 1. Which of the following statements about a country with a trade deficit is not true? Why? A. exports < imports B.net capital outflow < 0 C.investment < savingIn which of the following circumstances should a small open economy run a trade deficit? Select all correct answers. An oil-producing country that recognizes demand for oil will be lower in the future due to climate change Low fertility and increased life expectancy boosts the saving rate O A devastating earthquake reduces the country's industrial capacity O A policy reform boosts productivity growth
- An economy can run a trade deficit (have negative exports) permanently if: a. The Current and Financial account generate a net outflow of money, and the external debt does not increase as percentage of GDP. b. The level of GDP of the country is sufficiently low. c. Migration of the national labour force to overseas is allowed. d. The Current and Financial account bring enough net inflow of money, and the external debt does not increase as percentage of GDP.Pls help with below homework. explain why tariffs are unlikely to change the level of a current account deficit when a country is fully employed ?1. Other things equal, what is the likely impact of a U.S. trade deficit on 1. the current account? 2. foreign savings if domestic investment is greater than domestic saving? 3. foreign savings if domestic investment is less than domestic saving?
- The relation of foreign debt/GDP of country Indebted is 60%, given that the greatest part is sovereign debt (i.e., it represents government obligations with foreign investors). Given that the foreign investors are concerned about a possible default by the Indebted government, the interest rate on the debt is 10%. Assume that product growth for Indebted is only 1% and that the capital-account balance is equal to zero. a. Compute the current-account balance Indebted needs to maintain the debt/GDP ratio constant. b. The deficit in current account for Indebted is 6.8% of GDP. Calculate the lack in current resources and interpret the result.show in graph how the current account got a deficit of 12% GDP and the budget deficit of 3%. Suppose a country has a large current account deficit (in the vicinity of 12% of GDP). It has a gross capital formation rate of 28% of GDP. The country has an overall budget deficit of 3% of GDP. The share of Household and NPISHs Final Consumption Expenditure is 68% of GDP and that of General Government Final Consumption Expenditure is 12%.A government official announces a new policy. Thecountry wishes to eliminate its trade deficit, but willstrongly encourage financial investment from foreignfirms. Explain why such a statement is contradictory.
- provides some hypothetical data on macroeconomicaccountsforthreecountriesrepresented by A, B, and C and measured in billions of currency units. In Table, private household saving is SH, tax revenue is T, government spending is G, and investment spending is I. a. Calculate the trade balance and the net inflow of foreign saving for each country. b. State whether each one has a trade surplus or deficit (or balanced trade). c. State whether each is a net lender or borrower internationally and explain.1 PART - I 1.1 Multiple Choice Questions Q1 If the government of a small open economy wishes to reduce a trade deficit, which policy action will be successful in achieving this goal? a. increasing taxes b. increasing government spending c. increasing investment tax credits d. imposing protectionist trade policies Q2 When exports exceed imports, all of these are true EXCEPT: a. net capital outflows are positive. b. net exports are positive. c. domestic investment exceeds domestic saving. d. domestic output exceeds domestic spending. Q3 If the information technology boom increases investment demand in a small open economy, then net exports, and the real exchange rate a. increase; appreciates b. increase; depreciates c. decrease; appreciates d. decrease; depreciatesQ3-14 If a country's currency's external value is tied or pegged to the currency values of the country's leading trading partners, this arrangement is known as a Select one: a. peg against the SDR. b. managed float. c. peg against a "basket" of currencies or a "composite." d. currency board.