What is the current account balance

Assignment Help Business Economics
Reference no: EM133124828

Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1% of Germany's GDP; private savings is 20% of GDP; and physical investment is 18% of GDP.

a) Based on the national saving and investment identity, what is the current account balance?

b) If the government budget surplus falls to zero, how will this affect the current account balance?

Reference no: EM133124828

Questions Cloud

What is malinvestment : 1. What is malinvestment? How does this differ from the idea of overinvestment?
Difference in proportions of success : A.J. Jones and J.R. Smith both work 225 days a year, one at a department store owned by Lancelot Frisbury and the other at a print shop owned by Lancelot's brot
Improve the operation of the private sector : How can laws and regulations improve the operation of the private sector?
Really-existing socialism : -Grand Narrative: What made-and kept-the pace of economic transformation and creative destruction so much greater in the long 20th century than before?
What is the current account balance : Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1% of Germany's GDP; private savings is 20%
Utilitarian analysis of toxic-waste issue and social-justice : 1. What, specifically, is the root problem that social ecology tries to solve? How, for social ecology, is deep ecology part of that root problem?
Illustrate the market for chemotherapy : a. Personal protective equipment used by technicians to administer heroic, end-of-life (i.e., perfectly inelastic demand) chemotherapy treatments are highly tox
Favorable and unfavorable balance of payments : Distinguish between a favorable and unfavorable balance of payments. (Explain briefly with references)
Evaluate the principles and vocabulary of csr : Critically analyse and evaluate the principles and vocabulary of Corporate Social Responsibility within the global context in which contemporary business

Reviews

Write a Review

Business Economics Questions & Answers

  Determine the equilibrium price and quantity

a. Determine the equilibrium price and quantity. Show the equilibrium graphically.

  Accused of paying bribes to the government of a host country

A multinational company is accused of paying bribes to the government of a host country to obtain permission to build a production factory. the public relations manager of the company defends the company's actions as being ethically sound; he states ..

  Statement of cash flows

ABC Company acquired some land (independently appraised at $12,000) and paid for it by issuing 1,000 shares of its common stock (par $10 per share; no market price was quoted). How should this transaction be reported on the Statement of Cash Flows (S..

  Calculate the equilibrium quantity-equilibrium price

A local market for new wood pallets has daily demand described by P=178-0.2Q and supply described by P=85+0.1Q. Calculate the equilibrium quantity. Suppose a market has a supply described by P=3.0+0.1Q and a demand described by P=6.0-0.2Q. Calculate ..

  Labor between sectors and of output of the two goods

Developia produces two goods, manufactures and food, using three factors of production: capital, land and labor. The production of manufactures requires capital and labor, while the production of food uses land and labor. What is the effect on the al..

  Given the following hypothetical data in millions of

given the following hypothetical data in millions of naira1.gross private domestic investmentn592.contributors for

  What is the marginal rate of technical substitution of labor

What is the marginal rate of technical substitution of labor for capital at any point along an isoquant?

  One critic of the north american free trade agreement

One critic of the North American Free Trade Agreement argued that "it can't be in our interest to sign this deal; Mexico gains too much from it." What does the theory of the gains from trade have to say about that criticism?

  Opportunity cost of financial capital invested in business

$1000 was withdrawn from a savings account earning 3% interest, $2000 additional was borrowed @ 7% interest. What is the opportunity cost of the financial capital invested in the business? When a firms only variable input is labor, then the slope of ..

  Transportation costs create boundaries for markets

Transportation costs create boundaries for markets. What would be the effect of one market area increasing the price it is willing to pay for milk?

  Demand curve facing monopolistically competitive firm

In the long run, what happens to the demand curve facing a monopolistically competitive firm that is earning short-run profits? The demand curve will shift to the left and became more elastic. The demand curve will shift to the right and became more ..

  Consider income guarantee program with income guarantee

Consider an income guarantee program with an income guarantee of $6,000 and a benefit reduction of 50%. A person can work up to 2,000 hours per year at $8 per hour. Draw the person’s budget constraint without the income guarantee. Fully label the gra..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd