Starting from an initial position of equilibrium

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"Starting from an initial position of equilibrium with X – M =0, an economy experiences income growth. If this growth is due to an autonomous increase in investment, then the balance of trade will move into a deficit, while if it is due to an exogenous increase in exports then the balance of payments will display a surplus, although the surplus will be less than the initial increase in exports.”

Reference no: EM13978015

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