Ppt on current account deficit united

Unit 5: International Trade

the lowest opportunity cost. Ex: Ronald has a comparative advantage in burgers because he has a lowest PER UNIT opportunity cost. Countries should trade if they have a relatively lower opportunity cost. They should specialize in the/in the Dollar. The balance of payments is made up of two accounts. The current account and the capital account. Which countries have the highest account surpluses and account deficits? Current Account The Current Account is made up of three parts: Trades in Goods and Services (/


Freely Floating Exchange Rates

Floating Exchange Rates The Determinants of Floating Exchange Rates Consider the market for British pounds in the United States. Any of the following could cause demand for pounds to increase and the pound to appreciate/Current account: Records the flow of money for the purchase of goods and services between a country and its trading partners. Current account deficit: If a country spends more on imports than it earns from the sale of its exports, its current account is in deficit (if M>X) Current account/


Unit 4: The Global Economy: International Trade and Development

Unit 4: The Global Economy: International /current account deficit The Current Account How can a country pay out more than it receives? The answer is found in the capital and financial account, which must record a surplus Alternatively, if the current account records a surplus, then the capital and financial account must record a deficit The Capital and Financial Account The capital and financial account is subdivided into two accounts: Capital account Financial account Capital Account The capital account/


Gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. Silver standard is a monetary system in.

the Bretton Woods Articles of Agreement that the IMF could make loans only for current account deficits and not for capital and reconstruction purposes. Only the United States contribution of $570 million was actually available for IBRD lending. In addition,/ in the currency market to stop their currencies appreciating Led to the developing world as a whole preventing current account deficits in 1999 It was in response to unsympathetic treatment following the 1997 Asian Financial Crisis. The call for/


Current account imbalances Doomsday or soft landing?

world Doomsday scenario Nouriel Roubini and Brad Sester http://www.rgemonitor.com/http://www.rgemonitor.com/ Emerging market CBs stop buying US assets (Central banks financed 90% of the United States’ $530 billion current account deficit in 2003) Housing market crush in US leads to loss of wealth by households and increase savings risk a disorderly unraveling of the Bretton Woods 2 system: –sharp/


Balance of Payments, Exchange Rates & Trade Deficits.

to buy imports ( current account deficit), then China will either use those U.S. dollars to buy our products (current account credit), or invest those dollars in financial assets or real assets (capital account credit). The capital account mainly measures debt forgiveness./ value of the dollar will appreciate. Recent U.S. Trade deficits The United States has experienced large and persistent trade deficits in recent years. These deficits rose rapidly between 2001 and 2006 before declining when consumers and /


Romanian Government Reforms 2009 - 2011 1. A.THE ECONOMIC CRISIS – the most severe in the last 60 years B. BUDGETARY DEFICIT of 5.7% (according to the.

) The Injection Pump Factory of Delphi Diesel Systems Romania Creating a new SUV car model – Automobile DACIA Factory - pumping units for oil drilling - LUFKIN Industries The manufacture of new carriage types for passengers - SC REMAR C. Measures to boost economic/. euro) FDIs amounted to 799 mil. euro in the first five months of 2011, covering 43.9% of the current account deficit. The construction sector returned to a positive trend in May 2011  The volume of construction works increased in May 2011 /


Unit 5: International Trade 1. International Trade Why do people trade? 2.

the lowest opportunity cost. Ex: Ronald has a comparative advantage in burgers because he has a lowest PER UNIT opportunity cost. 8 Countries should trade if they have a relatively lower opportunity cost. They should specialize in / in the Dollar. The balance of payments is made up of two accounts. The current account and the capital account. Which countries have the highest account surpluses and account deficits? Current Account The Current Account is made up of three parts: 1.Trades in Goods and Services /


The Academy of Economic Studies Bucharest Doctoral School of Banking and Finance CURRENT ACCOUNT DEFICIT DETERMINANTS: AN EMPIRICAL ANALYSIS ON ROMANIA.

) zLane and Milesi-Ferretti (2002) A brief characterization of Romanian current account zUntil 1989 - current account surplus zSince 1990 - current account deficit zCurrent account deficit of 8.5% of GDP in 1990 zAnother peak of 7.2% of GDP in 1998 zSudden reduction of current account deficit in 1999 and 2000 Fig.1 Econometric estimations (1) zI used Perron unit roots test zCurrent account deficit do not have structural break ResultsFig.2Perron Econometric estimations (2/


EXCHANGE RATES & BALANCE OF PAYMENTS CHAPTER 36 UNIT 8B, DAY 1 International Finance.

(20 min) Unit 8 Study Guide (30 min) The Balance of Payments The balance of payments is a summary of a country’s international economic transactions in a given period of time. It is an accounting statement of all international money flows in a given time period. Foreign Exchange Market Equilibrium:  Equilibrium Price=Exchange Rate  Equilibrium Quantity=Balance of Payments Current Account (Deficit) Capital Account (Surplus/


Current Events intelligence/2015/03/18/the-federal- reserve-should-lay-out-clear-monetary- policy-ruleshttp://www.usnews.com/opinion/economic-

two accounts. The current account and the capital account. Which countries have the highest account surpluses and account deficits? The Loanable Funds Model Revisited Loanable Funds Markets in Two Countries Current or Capital Account? Identify if examples are counted in the current or capital account and/foreign currency If the dollar losses value compared to another country’s currency More units of dollars are needed to buy a single unit of the other currency. The dollar is said to be “Weaker” Appreciation/


Unit 1 Outline Module 1: Innovations and Entrepreneurs Module 2: Small Business Module 3: Marketing Module 4: Accounting.

accounting reports to possess, and include. MCCHERG Red Rooster’s Ugly Chickens Accounting Principles Monetary Unit – all items must be recorded and reported in a common unit of measurement; that is, Australian dollars Consistency – accounting/) Bank overdraft (bank that allows the account holder to withdraw more than their current account balance) Term Loan (a form of external/ is an accounting report which predicts future cash receipts and payments, determines the expected cash surplus or deficit, and thus/


AP/ Honors Macroeconomics Unit 4 Notes and Terms Fiscal and Monetary Policy.

M3 = M2 + Large Time Deposits Broadest definition of the money supply M1M1M2M2 54% 46% M1M1 20% Savings Deposits Including Money Market Deposit Accounts (MMDA) Small Time Deposits Money Market Mutual Funds Held By Individuals (MMMF) Currency Checkable Deposits 15% 11% 54% $1,375 Billion / The sum of all past budget deficits. Currently $10.6 trillion (November, 2008). Who do we owe the debt to? As of November 2007, Japan ($580 billion), China ($390 billon) and the United Kingdom ($320 bilion) are the biggest/


Unit 5: International Trade 1. International Trade Why do people trade? 2.

the lowest opportunity cost. Ex: Ronald has a comparative advantage in burgers because he has a lowest PER UNIT opportunity cost. 8 Countries should trade if they have a relatively lower opportunity cost. They should specialize in / in the Dollar. The balance of payments is made up of two accounts. The current account and the capital account. Which countries have the highest account surpluses and account deficits? Current Account The Current Account is made up of three parts: 1.Trades in Goods and Services /


Copyright 2008 The McGraw-Hill Companies 36-1 Financing International Trade Capital and Financial Account Flexible Exchange Rates Fixed Exchange Rates.

Word Key Terms End Show Key Terms balance of payments current account balance on goods and servicesbalance on goods and services trade deficit trade surplus balance on current accountbalance on current account capital and financial accountcapital and financial account balance on capital and financialbalance on capital and financial balance-of-payments deficits and surplusesbalance-of-payments deficits and surpluses official reserves flexible- or floating- exchange-rate systemflexible- or floating/


Current theoretical & practical issues in autism diagnosis Dr. Elizabeth Sheppard Developmental Cognitive Neuropsychology (C8CLDC) Child Clinical Neuropsychology.

for increase 3) The current rate is correct but /M., & Decoufle, P. (2001). Prevalence of autism in a United States population: The Brick Township, New Jersey, investigation. Pediatrics, 108/account of autism Talk about problems with EF account of autism Neuropsychological Studies The goal of neuropsychological studies is to establish the primary deficit in each disorder. The goal of neuropsychological studies is to establish the primary deficit in each disorder. A PRIMARY deficit needs to: A PRIMARY deficit/


International Economics: Theory and Policy, Sixth Edition

international sales or purchases of assets appear in the financial account. Copyright © 2003 Pearson Education, Inc. Summary The capital account records asset transfers and tends to be small in the United States. Any current account deficit must be matched by an equal surplus in the other two accounts of the balance of payments, and any current account surplus by a deficit somewhere else. International asset transactions carried out by central/


Unit 2: The Global Economy “Is the world really flat?”

Interest paid to foreign citizens on their investments here Balance of Payments Account There are two main accountsCurrent Accounts (CA) & Financial Accounts (FA) previous“Capital Account” If an account is positive it is said to have a surplus; if negative = a deficit The overall account must be balanced (or total zero) CA + FA = zero Balance of Payments Account Current Account (CA) trade in goods & services: Exports of goods & services + (plus) Imports/


National Income Accounting and the Balance of Payments.

payments, while international sales or purchases of assets appear in the financial account. Summary  The capital account records asset transfers and tends to be small in the United States.  Any current account deficit must be matched by an equal surplus in the other two accounts of the balance of payments, and any current account surplus by a deficit somewhere else.  International asset transactions carried out by central banks are included/


Unit 5 International Trade and Finance

be in the Dollar. The balance of payments is made up of two accounts. The current account and the capital account. Which countries have the highest account surpluses and account deficits? Current Account The Current Account is made up of three parts: Trades in Goods and Services (Net Exports/Appreciation The increase of value of a country’s currency with respect to a foreign currency Fewer units of dollars are needed to buy a single unit of the other currency. The dollar is said to be “Stronger” S&D for the/


Does Capital Mobility Finance or Cause a Current Account Imbalance? Antonio H-D Yan Universidad Francisco Marroquin March 22, 2006.

it is more nearly correct to say that net capital inflows cause the current account deficit. ” William Poole (2001) “ That many commentators have expressed the mistaken view that the capital and financial account ‘ finances ’ the current account. In fact, for the United States, changes in the capital and financial account have been driving changes in the current account for many years. ” “ That many commentators have expressed the mistaken view that/


Slide 12-1Copyright © 2003 Pearson Education, Inc. The National Income Accounts  Gross national product (GNP) The market value of all final goods and.

sales or purchases of assets appear in the financial account. Slide 12-28Copyright © 2003 Pearson Education, Inc. Summary  The capital account records asset transfers and tends to be small in the United States.  Any current account deficit must be matched by an equal surplus in the other two accounts of the balance of payments, and any current account surplus by a deficit somewhere else.  International asset transactions carried out by/


Public Finance and Public Policy Jonathan Gruber Third Edition Copyright © 2010 Worth Publishers 1 of 37 Budget Analysis and Deficit Financing 4.1 Government.

T F I N A N C I N G Do Current Debts and Deficits Mean Anything? A Long- Run Perspective 4.3 Alternative Measures of Long-Run Government Budgets Generational Accounting The budget measure answers the question by first estimating the government’/ perhaps growing), it is far from perfect. As a result, the supply of capital to the United States may not be perfectly elastic, and government deficits could crowd out private savings. Public Finance and Public Policy Jonathan Gruber Third Edition Copyright © 2010 /


Balance of Payments Current Account data is for 1998.

Japanese retire their spending will increase => U.S. current account deficit will shrink. (Modigliani Life-Cyle model). Twin deficit problem? William Branson of Princeton: The U.S. government deficit causes an inflow of capital from abroad, which in turn leads to a negative current account balance. Current Acct deficits => capital account surpluses => foreigners have a claim on future real resources in the United States. True, but it is only a problem/


Chapter 12 National Income Accounting and the Balance of Payments November 2009.

S – CA Countries can pay for investment either by using domestic saving or by borrowing foreign funds equal to the current account deficit.  a current account deficit implies a financial capital inflow or negative net foreign investment. When S > I, then CA > 0 and net /© 2009 Pearson Addison-Wesley. All rights reserved. 12-48 Table 12-3: International Investment Position of the United States at Year End, 2005 and 2006 (millions of dollars) Copyright © 2009 Pearson Addison-Wesley. All rights reserved. /


Objectives Accounting system of a nations international transactions: current, capital, and financial accounts Explain the relationship between GDP and.

: http://www.bea.gov/iTable/index_ita. cfm Are Current Account Deficits Harmful? The relationship between the trade deficit, production and domestic demand is an identity if domestic demand is greater than GDP => trade deficit (argument ignores transfers and income payment) Consequently, current account balance does not tell us why an economy runs the current account deficit or surplus U.S. Current Account Deficit (cont.) A current account deficit is not necessarily a sign of weakness: in/


2011 Examination Question (5) (a)“The currency swap contract behaves like a long-dated forward exchange contract, in which the forward rate is the current.

prospects. 37 Regional Currency: East Asia Perspective (2) Optimum Currency Area (OCA) for East Asia? Asian Currency Unit (ACU) as unit of account. Pegging member currencies to ACU. Govt. interventions necessary to defend the peg. Lessons from Europe (EMS) points to/to live beyond its means with huge twin deficits (fiscal and current account). The US is a huge consumer importing nearly anything and everything from anywhere and everywhere, never mind the yawning BOP deficit, so long as it is financed by/


Public Finance and Public Policy Jonathan Gruber Third Edition Copyright © 2010 Worth Publishers 1 of 37 Budget Analysis and Deficit Financing 4.1 Government.

T F I N A N C I N G Do Current Debts and Deficits Mean Anything? A Long- Run Perspective 4.3 Alternative Measures of Long-Run Government Budgets Generational Accounting The budget measure answers the question by first estimating the government’/ perhaps growing), it is far from perfect. As a result, the supply of capital to the United States may not be perfectly elastic, and government deficits could crowd out private savings. Public Finance and Public Policy Jonathan Gruber Third Edition Copyright © 2010 /


US Current Account Balances: Share of GDP. Sustainability What does it mean to say that the CA is sustainable? –Can the economy continue to borrow? –When.

rate thus means that we are more competitive –changes in Q will impact net exports, and hence, the current account. –If a current account deficit is to be reversed an appreciation of the real exchange rate may be one of the mechanisms of adjustment. /enough to compensate for trade cost. Trade costs in practice Transportation costs U.S. imports: freight costs from 1% to 27% of unit cost. Landlocked countries: prices 55% higher (vs. coastal) –Trade policy Average tariffs: 5% (advanced), 10% (developing) –/


1 Ch. 12: National Income Accounting and the Balance of Payments.

or by acquiring foreign funds equal to the current account deficit. Countries can finance investment either by saving or by acquiring foreign funds equal to the current account deficit. a current account deficit implies a financial capital inflow or negative net foreign investment. a current account deficit implies a financial capital inflow or negative /employers in the US were firms from the United Kingdom (908,000), Germany (655,000), France (473,000), the Netherlands (442,000) and Switzerland (389,000)."


AP MACRO UNIT 8 MR. LIPMAN INTERNATIONAL TRADE & FINANCE.

balance of payments is made up of two accounts. The current account and the capital account. Which countries have the highest account surpluses and account deficits? The Loanable Funds Model Revisited Loanable Funds Markets in Two Countries The Current Account is made up of three parts: 1.Trades/a foreign currency If the dollar losses value compared to another country’s currency More units of dollars are needed to buy a single unit of the other currency. The dollar is said to be “Weaker” Appreciation The /


Tax Reform in the United States by Jon Forman Alfred P. Murrah Professor of Law University of Oklahoma Norman, Oklahoma & ATAX Fellow, UNSW TC Beirne School.

Real Income Rising Poverty 48 U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2009, at 14, (Current Population Report No. P60-238, September 2010), http://www.census.gov.http://www.census.gov 49 Congressional Budget/1 from tax reform that contributes to deficit reduction  comprehensive tax reform to produce a system which is fairer, has fewer loopholes, less complexity, and is not rigged in favor of those with lawyers and accountants to game it. 96 The White House/


Fund Accounting and Government-Wide Statements Reporting Including GASB 34 November 12, 2012 William Spinelli, CPA, MBA Finance Director, City of Leesburg.

to pay for health insurance for government retirees Fiscal Responsibility 14 Chapter 9 Bankruptcies – Budget deficits have forced approximately 28 governmental entities to file for bankruptcy protection since 2010. – Majority of/208.000Due to other Government Units 210.000Compensated Absences - Current 234.000Other Bonds Payable - Current 234.900Other Bonds Payable - Long Term Portion 241.000Appropriations 244.000Fund Balance Uniform Accounting System Manual (Cont.) 50 Revenue Accounts - 9 digit number /


Unit Six Inflation, Unemployment, and Stabilization Policies Unit Six Inflation, Unemployment, and Stabilization Policies AP Macroeconomics MR. Graham.

a future debt but are not included in the usual debt statistics (i.e. transfer payments). – Social Security, Medicare and Medicaid currently account for almost 40% of federal spending. For this reason, many economists argue that the total federal debt of $15 trillion, the/oil embargo in the early 1970s in the United States? Mini Poster Group Task: Your government has become corrupt and inept (if it is not already). The treasury and central bank have run massive deficits for the past 10 years. Your countries /


The Balance of Payments: Linking the United States to the International Economy Current account records a country’s net exports, net income on investments,

of a Government Budget Deficit on Investment The Twin Deficits, 1978–2006 Why Is the United States Called the “World’s Largest Debtor”? Making the Connection Large current account deficits have resulted in foreign investors purchasing large amounts of U.S. assets. Exchange Rate: Can the US Current Account Deficit be Sustained? Balance of payments Balance of trade Capital account Closed economy Currency appreciation Currency depreciation Current account Financial account K e y/


Reinert/Windows on the World Economy, 2005 Accounting Framework CHAPTER 12.

items than exports and imports Reinert/Windows on the World Economy, 2005 17 The Balance of Payments Equations A current account surplus must be accompanied by a capital account deficit A current account deficit must be accompanied by a capital account surplus A common allegation about the place of the United States and Europe in the world economy is that the future lies in low-wage countries  Attracting the/


Copyright 2008 The McGraw-Hill Companies 19-1 Financing International Trade Capital and Financial Account Flexible Exchange Rates Fixed Exchange Rates.

Word Key Terms End Show Key Terms balance of payments current account balance on goods and servicesbalance on goods and services trade deficit trade surplus balance on current accountbalance on current account capital and financial accountcapital and financial account balance on capital and financialbalance on capital and financial balance-of-payments deficits and surplusesbalance-of-payments deficits and surpluses official reserves flexible- or floating- exchange-rate systemflexible- or floating/


1 International Finance Chapter 5 National and International Income Accounting and the Balance of Payments.

late 1980s and early 1990s. The United States briefly ran a government surplus in the late 1990s but has now returned to a deficit position. Private and Public Saving Trends: Industrial Countries (continued) 18 Twin Deficits CA = S p – I – (G – T) –If S p and I remain constant, a high government deficit (G – T) generates a high current account deficit. –In reality, S p and I/


THE INTERNATIONAL ECONOMIC ACTIVITY OF THE NATION The balance of payments Fundamentals of balance of payment accounting Defining international economic.

items is exactly equal to the total of debit items. Hardly does this occur. There is either a deficit or a surplus in the current accounts of the balance of payments. The balance of payment disequilibrium is a situation whereby payments of visible exports /. Most trading or industrial countries followed England’s move adopted the gold standard. each country set a certain number of units of its currency for ounce of gold and the ratios of their gold equivalence established the exchange rate between any two /


AS: 3.2.3 E CONOMIC PERFORMANCE 2.3.4 The balance of payments on current account Why do countries trade with each other?

key points to develop a balanced argument as to whether or not a persistent deficit on the current account of the balance of payments matters or not. Yes, it mattersNo, it doesn’t matter F ACTORS INFLUENCING A COUNTRY ’ S C URRENT ACCOUNT BALANCE  Improving productivity is crucial in lowering unit costs and making the UK a competitive economy  Inflation reduces the competitiveness of an/


Looking Ahead: Plan for the Week +: Today: – Article on Fiscal Cliff – 1 st Half of Ch. 12 – Unit 4 Study Guide Wednesday: – Finish Ch. 12 – Finish Unit.

accounting purposes – begins on October 1 for the federal government. Budget Components Automatic 80 % of budget current revenues and expenditures the result of decisions made in prior years. Discretionary 20 % of budget elements of the federal budget not determined by past legislative or executive commitments. If fiscal policy can only impact discretionary spending, how effective is it? Anatomy of Deficits Cyclical DeficitsStructural Deficits/) relating to the current Unit. Possible sources include online/


BALANCE OF PAYMENTS ACCOUNTS UNIT 8: INTERNATIONAL TRADE AND FINANCE OBJ: STATE THE IMPLICATIONS OF HAVING A CURRENT ACCOUNT SURPLUS/DEFICIT BY DISCUSSING.

consumer goods, explain the state of Venezuela’s financial account. 3. How would a decrease in real income in the United States affect the U.S. current account balance? Explain. SCENARIO ANSWERS 1. a. Current account (US credit, China debit) b. Financial account (US credit, China debit) 2. Venezuela is running a current account deficit, therefore they must have a financial account surplus. Further, they are having loanable funds supplied to/


Michigan Association of Municipal Clerks Basics of Governmental Accounting/Budgeting Presented By:Chrystal Simpson, CPA June 16, 2016.

own assets, liabilities and fund equities. (Continued on the next page) 3 Introduction to Governmental Fund Accounting  Comment  A governmental unit is a combination of several distinctly different operations, each of which functions, and must be reported / Amount of fund balance (deficit) accumulated + Amount of fund balance (deficit) accumulated from prior years and the estimated surplus or deficit expected in the current year?  4.Is the budget balanced (including fund balance or deficit)?  5.Has the /


Slides prepared by Thomas Bishop Copyright © 2009 Pearson Addison-Wesley. All rights reserved. Chapter 12 National Income Accounting and the Balance of.

or I = S – CA Countries can finance investment either by saving or by acquiring foreign funds equal to the current account deficit.  a current account deficit implies a financial asset inflow or negative net foreign investment. When S > I, then CA > 0 so that/) Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 12-41 Table 12-3: International Investment Position of the United States at Year End, 2005 and 2006 (millions of dollars) Copyright © 2009 Pearson Addison-Wesley. All rights reserved./


Slides prepared by Thomas Bishop Copyright © 2009 Pearson Addison-Wesley. All rights reserved. Chapter 12 National Income Accounting and the Balance of.

or I = S – CA Countries can finance investment either by saving or by acquiring foreign funds equal to the current account deficit.  a current account deficit implies a financial asset inflow or negative net foreign investment. When S > I, then CA > 0 so / 12-38 Table 12-1: National Income Accounts for Agraria, an Open Economy (bushels of wheat) Copyright © 2009 Pearson Addison-Wesley. All rights reserved. 12-39 Table 12-3: International Investment Position of the United States at Year End, 2005 and 2006 /


© The McGraw-Hill Companies, Inc., 1998 Irwin/McGraw-Hill Deficits And Debt Chapter 19.

deficit and a nominal deficit. © The McGraw-Hill Companies, Inc., 1998 Irwin/McGraw-Hill Chapter Objectives u Explain why, even though the real budget deficit of the United States is much lower than the nominal deficit, there is still reason for concern about the deficit/-Hill Reasons for Concern About Budget Deficits u The government uses accounting tricks to make the deficit look smaller. l These are called/system is one in which pensions are paid from current revenues. © The McGraw-Hill Companies, Inc., /


Financial Management of an Academic Unit College of Human Medicine Michigan State University November 9, 2006 Executive Director, University Physicians,

Other Revenue Issues: 1. 1.Hospital margins declining, growing deficits; Future support unclear and unstable. 2. 2.Philanthropy subject to economy, income and estate tax issues, all of which are currently changing. 38 Clinical Revenue: 1. 1. Fastest growing, /35%. Accounts for 50% of total budget when affiliated hospital and clinical service contracts included. 3. 3. Represents major source of cross-subsidy for other SOM missions and programs. 39 Clinical Revenue Issues: 1. Reimbursement per unit of service/


Balance of Payments Accounting The Balance of Payments is the statistical record of a country’s international transactions over a certain period of time.

Trends Since 1982 the U.S. has experienced continuous deficits on the current account and continuous surpluses on the capital account. During the same period, China has experienced the opposite. Balances on the Current (BCA) and Capital (BKA) Accounts of the United States Source: IMF International Financial Statistics Yearbook, 2000 Balances on the Current (BCA) and Capital (BKA) Accounts of United Kingdom Source: IMF International Financial Statistics Yearbook, 2000 Balances/


The balance of payments, exchange rates, and trade deficits

trade deficits in the United States during the late 1990s and early 2000s was: Action taken to raise tariffs in the United States A declining U.S. saving rate Slower economic growth in the United States Increased direct foreign investment in the United States Source: Ch 1, Micro Test Bank, #2 Copyright © Houghton Mifflin Company. All rights reserved. Taylor Economics – Chapter 21 5. The current account in/


1 Chapter 8 Aggregate Accounts, Budget Constraints, and Model Consistency © Pierre-Richard Agénor The World Bank.

payments. 8 Current Account Transactions 9 l See Table 8.1 è Rows: sources of finance for each sector. è Columns: uses of finance for each sector. l Ex Post: each sector’s deficit must be financed,  sum of rows = sum of columns. l Ex Ante: sectoral balances are constraints. 10 National Accounts l Row 1 & Column A, National Accounts: consolidated current-period activities of all production units; è incorporated/


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