Question

In: Economics

5. a) Explain how to budget deficit can create a trade deficit. b) Briefly discuss how...

5. a) Explain how to budget deficit can create a trade deficit.

b) Briefly discuss how time lag could be an argument against policy activism. What is the role of automatic stabilizer in this context? Explain with examples

c) What is the time inconsistency problem? Give two examples of time inconsistency problem that are not in your book.

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

What is the difference between the trade and budget deficit? How might an extended budget deficit...
What is the difference between the trade and budget deficit? How might an extended budget deficit lead to lower economic growth?
What is the difference between the trade and budget deficit? How might an extended budget deficit...
What is the difference between the trade and budget deficit? How might an extended budget deficit lead to lower economic growth?
How can you explain a persistent/sustained US trade deficit?
How can you explain a persistent/sustained US trade deficit?
How can you explain a persistent/sustained US trade deficit?
How can you explain a persistent/sustained US trade deficit?
Following an increase in the Canadian budget deficit, it has been observed that the trade deficit...
Following an increase in the Canadian budget deficit, it has been observed that the trade deficit has increased, the Canadian real exchange rate has appreciated, the net capital outflow has decreased, and the interest rate has decreased. Which one of these events is contrary to what the open-economy macroeconomic model predicts concerning the effects of an increase in the budget deficit? a. The interest rate has decreased. b. The real exchange rate has appreciated. c. The net capital outflow has...
a.What are the links between the budget deficit and trade deficit? What would be the most...
a.What are the links between the budget deficit and trade deficit? What would be the most effective way to reduce the trade deficit. b.How has COVID-19 affected the budget deficit? Be specific.
what are the links between the budget deficit and trade deficit? what would be the most...
what are the links between the budget deficit and trade deficit? what would be the most effective way to reduce the trade deficit ? what is the best way to deal with our trade deficit?
a. Define value-added trade. b. How is value-added trade measured? c. Briefly discuss the problem of...
a. Define value-added trade. b. How is value-added trade measured? c. Briefly discuss the problem of using conventional trade flow measures in an era when trade in components or parts of products dominate. Using an example to illustrate your answer.
1. What is the link between the budget deficit and the trade deficit? Government borrowing from...
1. What is the link between the budget deficit and the trade deficit? Government borrowing from the budget deficit leads to higher real interest rates which cause foreigners to invest in the U.S. which increase the international value of the dollar causing imports to rise and exports to fall....i.e. trade deficit. Government borrowing from the budget deficit leads to higher real interest rates which cause foreigners to pull their money out of the U.S. due to its cost which decrease...
What are the links between the budget deficit and trade deficit?  What would be the most effective...
What are the links between the budget deficit and trade deficit?  What would be the most effective way to reduce the trade deficit per class notes? (Lesson 18 and 19) What is the moral of the story with regards to our trade deficit as discussed in the class videos? How has COVID-19 affected the budget deficit?  Be specific.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT