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In an open economy, the domestic investment (I) is financed by private saving (SP), pubic saving (SG) and borrowing from foreign economies (M - X).
In an open economy, the domestic investment (I) is financed by private saving (SP), pubic saving (SG) and borrowing from foreign economies (M - X). How does a budget deficit (T - G < 0) in the current fiscal year affect the domestic investment if all the other things being constant. (10 marks)
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