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The problem is shown in the figure thx Refer to the following article The big flip - China may soon run its first annual current
The problem is shown in the figure thx
Refer to the following article "The big flip - China may soon run its first annual current account deficit in decades" published in The Economist on the 16th of March 2019. Consider this quote: "That China sells more to the world than it buys from it can seem like an immutable feature of the economic landscape. Every year for a quarter of a century China has run a current-account surplus. This surplus has been blamed for various evils including the decline of Western manufacturing and the flooding of America's bond market with the excess savings that fueled the subprime housing bubble. Yet the surplus may soon disappear." 1. Explain the concepts of Current Account, Trade Balance, and Financial Account within the Balance of Payments of a country. (4 points) 2. Use the framework provided by the National Accounts in open economy (the Balance of Payments and Net International Investment Position) to explain the connection between "China sells more to the world than it buys from it" and "the flooding of America's bond market with the excess savings that fueled the subprime housing bubble." (4 points)Step by Step Solution
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