A country finds itself in the following situation: a government budget deficit of $1200; total domestic savings of $400, and total domestic physical capital investment of $1300. According to the national saving and investment identity, if investment decreases by $300 while the government budget deficit and savings remain the same, what will be the new value of the trade deficit after investment decrease?
A country finds itself in the following situation: a government budget deficit of $1200; total domestic savings of $400, and total domestic physical capital investment of $1300. According to the national saving and investment identity, if investment decreases by $300 while the government budget deficit and savings remain the same, what will be the new value of the trade deficit after investment decrease?
Chapter20: Exchange Rates And The Macroeconomy
Section: Chapter Questions
Problem 2TY
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A country finds itself in the following situation: a government budget deficit of $1200; total domestic savings of $400, and total domestic physical capital investment of $1300. According to the national saving and investment identity, if investment decreases by $300 while the government budget deficit and savings remain the same, what will be the new value of the
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