Current account deficit must be reduced

Assignment Help Business Economics

Reference no: EM13853979

Suppose that the US current account deficit must be reduced. Explain in terms of CA ≈ (S – I) + (T – G) what must be done to reduce the current account deficit. Why will this be difficult? (Hint: It may be helpful to think about the household that has been living beyond its means, perhaps by borrowing on credit cards).

Reference no: EM13853979

Questions Cloud

Ways to a nations international transactions : Household finances are similar in some ways to a nation’s international transactions. Suppose a household consumes (spends) more than its income. What are 3 legal ways it can finance this deficit? Give an example of each. How can a nation that runs a..

A country produces only one good : A country produces only one good. It produced 5,000 units of the good during Year 1 and 6,000 units of the good in Year 2. The price of each unit of the good in Year 1 was $280 and it was $320 in Year 2. Suppose Year 1 is taken as the base year for t..

Fast-food restaurants post nutrition warning labels : State whether each of the following events will cause a movement along the demand curve for Big Mac or whether it will cause the demand curve for Big Mac to shift? If the demand curve shifts, indicate whether it will shift to the left or to the right..

What effect would the transactions have on the statement : What effect would the transactions have on the statement of changes in net assets prepared for the year ended December 31, 20X8?

Current account deficit must be reduced : Suppose that the US current account deficit must be reduced. Explain in terms of CA ≈ (S – I) + (T – G) what must be done to reduce the current account deficit. Why will this be difficult? (Hint: It may be helpful to think about the household that ha..

Assumption of neoclassical economics : Which of the following is an assumption of neoclassical economics?

Briefly explain what inflation targeting : Briefly explain what inflation targeting is and list the five (5) main elements related to it. Then discuss the four (4) advantages and three (3) disadvantages of this type of monetary policy strategy. Your response should be a minimum of one (1) sin..

Interstate commerce commission-federal trade commission : Beginning in the early 1900s, the federal government and Congress began the creation of administrative agencies, with the first two being the Interstate Commerce Commission (ICC) and the Federal Trade Commission (FTC). Briefly explain the driving for..

Markup above marginal cost that a monopolist charges : Other things being equal, the markup above marginal cost that a monopolist charges will be:

User Account

All Pages