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Twin Deficits Let's say that the budget deficit rises in a given country. If the twin deficits hypothesis holds, what other deficit rises? If the

Twin Deficits

Let's say that the budget deficit rises in a given country.

  1. If the twin deficits hypothesis holds, what other deficit rises?
  2. If the twin deficit hypothesis does not hold, what must happen to two other variables (Hint: If you are confused by the two parts, consider that it's just one variable).

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