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Is the budget deficit of a country linked to its current account balance? If so, how so? If not, why not? Explain how it is possible for the United States current account deficit to grow while the budget deficit has disappeared. Hint: There's an equation that will help answer this question.

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019

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Related questions

1. Is the budget deficit of a country linked to its current account balance? If so, how so? If not, why not? Explain how it is possible for the United States’ current account deficit to grow while the budget deficit has disappeared. Hint: There’s an equation that will help answer this question.

2. When looking at a nation’s financial account, is it possible to determine the total amount of official reserves available to that nation? If so, explain why. If not, explain why not

3. What can you say about the sign of the financial account if the government budget is balanced, and S is greater than I? Why?

1. How does encouraged saving of public and business correct secular over-absorption?

2. Is it true that when a country has a current account deficit, it has a capital account surplus? If so, if you are trying to turn a current account deficit into a current account surplus, does the capital account surplus become a capital account deficit? Please explain how that works.

3. What policies would fix low levels of technology and low levels of infrastructure in a country? Please explain in detail.

If a country has a current account deficit, this is often referred to as a situation where the country is spending beyond its means. What does this phrase mean in terms of the simple Keynesian model? Does the existence of the current account deficit imply that the country as a whole is a dissaver (i.e., that saving is actually negative)? Why or why not?

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