1. Is there a one-to-onerelationship between government budget and current account? If not, explain how they are related and derive the relation by using simple algebraic equations.

2. When government budget was balanced in 1990s, current account was in deficit. How could that be possible? How might that had happened? Explain with equation and words.

3. Is current account deficit a serious concern for any economy? Why or why not? explain clearly.