Suppose domestic investment increases, and there is no change in the amount of domestic private and public saving. Using the national savings and investment identity, show what happens to the size of the trade deficit.
What will be an ideal response?
If you were to re-arrange the identity, it would look like: Trade deficit = domestic investment - private domestic savings - Government savings. Therefore, if the domestic investment increases and the domestic private and public savings, then the overall trade deficit will increase. As the investment increases and everything else stays the same, the number will just get bigger, so therefore the trade deficit will increase.
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Why do purely technological theories have difficulty explaining recessions in which real GDP falls?
What will be an ideal response?
Which of the following is a general rule of business etiquette in the given city?
A) Beijing, China: If someone offers you his or her business car, accept it with both hands, read it immediately, and then present your business card to the person. B) Hong Kong, China: It is considered impolite to run out of business cards. C) Sydney, Australia: It is important to know about the latest sports matches. D) Berlin, Germany: When out with German business associates, try not to talk about sports. E) All of the above are examples of proper business etiquette around the world.
Human capital is
A. the human resources that perform the function of raising capital. B. the value of funds that entrepreneurs obtained from other people. C. what people get from physical capital. D. the accumulation of skills, training and education of workers.
When consumers spend and buy things regardless of their level of income, this is known as
A) bad financial management. B) using credit to its maximum. C) living the good life. D) autonomous consumption spending.