1. When a country runs a trade deficit, that obviously means their imports are greater than their exports, but what does a trade deficit mean in terms of the relationship between total domestic spending (consumption, investment, and government spending) relative to domestic output or income (GDP)? Explain.

1A. Suppose the dollar depreciates. How does this affect the US's NIIP? Explain.

1B. Suppose the value of assets in other countries increase while the value of assets here in the US decrease. How does this affect the US's NIIP? Explain.