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22 Feb 2018
We learned in Ch.13 that the private saving (Sp ) can be expressed in the following way: Sp = I + CA + (G â T) This equation tells us that to reduce a current account deficit, a country must increase its private saving, reduce domestic investment, or cut its government budget deficit. Nowadays, some people recommend restrictions on imports from China (and other countries) to reduce the American current account deficit. How would higher U.S. barriers to imports affect its private saving, domestic investment, and government deficit? Do you agree that import restrictions would necessarily reduce a U.S. current account deficit?
We learned in Ch.13 that the private saving (Sp ) can be expressed in the following way: Sp = I + CA + (G â T) This equation tells us that to reduce a current account deficit, a country must increase its private saving, reduce domestic investment, or cut its government budget deficit. Nowadays, some people recommend restrictions on imports from China (and other countries) to reduce the American current account deficit. How would higher U.S. barriers to imports affect its private saving, domestic investment, and government deficit? Do you agree that import restrictions would necessarily reduce a U.S. current account deficit?
Jamar FerryLv2
23 Feb 2018
