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Imagine that the U.S. economy finds itself in the following situation: a government budget deficit of $100 billion, total domestic savings of $1,500 billion, and
Imagine that the U.S. economy finds itself in the following situation:
a government budget deficit of $100 billion,
total domestic savings of $1,500 billion, and
total domestic physical capital investment of $1,600 billion.
What will be the current account balance if investment rises by $50 billion, while the budget deficit and national savings remain the same?
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