Suppose that in the country of Mistania, investment spending increases from $1740 to $1940. There is no change in Mistania's private or public savings. According to the national saving and investment identity, what happens to the trade balance as investment spending increases? OTrade deficit goes up OTrade deficit goes down OStays the same

Suppose that in the country of Mistania, investment spending increases from $1740 to $1940. There is no change in Mistania's private or public savings. According to the national saving and investment identity, what happens to the trade balance as investment spending increases? OTrade deficit goes up OTrade deficit goes down OStays the same

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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a. In the diagram, shift the relevant curve(s) to the show the long-run effect of an increase in the trade deficit, if the accompanying capital account surplus supports investment. Price level LRAS AS X AD Price level GDP b. In the diagram, shift the relevant curve(s) to the show the long-run effect of an increase in the trade deficit, if the accompanying capital account surplus supports consumption. LRAS AS X AD GDP
Answer and Breif explantion
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