Suppose Australia’s B∗0 is negative. Based on our two-period economy model, we can conclude that Australia:

PLS answer ASAP

Q2. Suppose Australia’s B∗0 is negative. Based on our two-period economy model, we
can conclude that Australia:

(a) will have to run a trade balance deficit at some point.
(b) will have to run a trade balance deficit in periods 1 and 2.
(c) does not have to run a trade balance deficit at some point because it is an advanced
country.
(d) will have to run a trade balance surplus at some point in time.
(e) will have to run a trade balance surplus in periods 1 and 2.
(f) does not have to run a trade balance surplus at some point because it is an advanced country.

Expert Solution

Rahul Sunny answered 2 years ago

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