A country finds itself in the following situation: a government budget surplus of $800; total domestic savings of $700, and total domestic physical capital investment of $1350. According to the national saving and investment identity, if investment increases by $500 while the government budget surplus and savings remain the same, what will be the new value of the trade deficit after the investment increase?

A country finds itself in the following situation: a government budget surplus of $800; total domestic savings of $700, and total domestic physical capital investment of $1350. According to the national saving and investment identity, if investment increases by $500 while the government budget surplus and savings remain the same, what will be the new value of the trade deficit after the investment increase?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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