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- Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?Suppose that in the country of Mistania, investment spending increases from $1740 to $1940. There is no change in Mistania's private or public savings. According to the national saving and investment identity, what happens to the trade balance as investment spending increases? OTrade deficit goes up OTrade deficit goes down Ostays the samea. Does the Philippines suffer a trade surplus or trade deficit for 2020 and first nine months of 2021? Explain.b. Does the Philippines suffer a current account surplus or current account deficit for 2020 and first nine months of 2021? c. What is the status of the Philippines Foreign Direct Investments for 2020 and first nine months of 2021? Explain. What is the status of the Philippines Foreign Portfolio Investments for 2020 and first nine months of 2021? Explain. d. What is the role of the Asia Infrastructure Investment Bank (AIIB) in the area of Global Finance? How is their financing structure different from the Asian Development Bank (ADB)?
- Net exports and net capital outflow: 1. Which of the following statements about a country with a trade deficit is not true? Why? A. exports < imports B.net capital outflow < 0 C.investment < savingprovides some hypothetical data on macroeconomicaccountsforthreecountriesrepresented by A, B, and C and measured in billions of currency units. In Table, private household saving is SH, tax revenue is T, government spending is G, and investment spending is I. a. Calculate the trade balance and the net inflow of foreign saving for each country. b. State whether each one has a trade surplus or deficit (or balanced trade). c. State whether each is a net lender or borrower internationally and explain.Suppose that government of Pakistan is considering an investment tax credit.i. How would this policy affect national saving, domestic investment, netcapital outflow, the real interest rate, the real exchange rate, and the tradebalance? Use graphs to explain your answer. ii. The representatives of several large exporter firms oppose the policy. Whymight that be the case? Explain in words.
- Suppose that Congress is considering an investment tax credit, which subsidizes domestic investment. a. How does this policy affect national saving, domestic investment, net capital outflow, the interest rate, the exchange rate, and the trade balance?b. Representatives of several large exporters oppose the policy. Why might that be the case?Is a trade deficit bad? Check all that apply. a. Yes, if current consumption is lower, and investment is higher. b. No, if economy provides an attractive investment environment. c. Yes, if borrowing from foreigners is used to increase current consumption. d. No, if it increases current consumption.show in graph how the current account got a deficit of 12% GDP and the budget deficit of 3%. Suppose a country has a large current account deficit (in the vicinity of 12% of GDP). It has a gross capital formation rate of 28% of GDP. The country has an overall budget deficit of 3% of GDP. The share of Household and NPISHs Final Consumption Expenditure is 68% of GDP and that of General Government Final Consumption Expenditure is 12%.
- Based on the table below, which of the following is likely to be true? a. From the first period to the second, the U.S. is using an increasing current account surplus to finance consumption. b. From the first period to the second, the U.S. is using an increasing financial account surplus to finance the larger budget deficit. c. From the first period to the second, public saving is increasing. d. From the first period to the second, the U.S. financial account deficit is increasing.a. In the diagram, shift the relevant curve(s) to the show the long-run effect of an increase in the trade deficit, if the accompanying capital account surplus supports investment. Price level LRAS AS X AD Price level GDP b. In the diagram, shift the relevant curve(s) to the show the long-run effect of an increase in the trade deficit, if the accompanying capital account surplus supports consumption. LRAS AS X AD GDPWhich of the following with respect to Namibia's Balance of Payments would be true if Toyota decided to move its Production plant in Isipingo South Africa to Walvis Bay Namibia ceteris paribus. i. There would be a net inflow of capital ii. There would be a deficit in the financial account iii. There would be a surplus in the financial account iv. There would be an outflow in the current account O A. i, ii, iii, iv O B. i and iii O Ci and ii O D. i, ii and iii
