Reference no: EM131396066
The Table below provides hypothetical data on macroeconomic accounts for three countries represented by A, B, and C, and measured in billions of currency units. S = private household saving; T = taxes; G= government spending; and I = investment.
Calculate the Current Account balance for each country. (Remember, the current account balance = X - M; i. e., it is the negative of (M - X).)
State whether each nation has a current account surplus or deficit.
Identify each nation's demand for financial capital. (Remember the Chapter 10 formulation: demand for financial capital = supply of financial capital. See chapter or Week 4 slide. )
(Important note: you know that if X<M, foreigners supply financial capital. However, if X>M, then foreigners demand (our) financial demand;. So if a nation runs a trade (current account) surplus, the amount of the surplus counts as part of our nation's demand for financial capital, not supply of financial capital.)
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A
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B
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B
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S
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7000
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5000
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5000
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T
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00
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5000
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5000
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G
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6000
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3500
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6500
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I
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8000
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4000
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4500
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