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Consider a country that has a trade deficit of $200 billion (net exports is - $200), private domestic savings of $500 billion, a government deficit
Consider a country that has a trade deficit of $200 billion (net exports is - $200), private domestic savings of $500 billion, a government deficit of $200 billion, and private domestic investment of $500 billion. To reduce the $200 billion trade deficit by $100 billion, by how much does private domestic savings have to increase? [Hint: apply the investment-saving relationship.]
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$100 billion
$120 billion
$200 billion
$150 billion
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