What is the situation of the private sector in each period

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Reference no: EM132198923

Question: In 2009 country has a fiscal deficit of 4.2% of its GDP and it has a deficit in the external sector of 2.6% of its GDP. Next year, 2010, this country implements a fiscal rule of 2% and it has now a deficit in its external sector of 3.7%, what is the situation of the private sector in each period? Explain graphically, using the balance sheets framework, and in words whether this situation is sustainable. What does sustainable means? (Hint: Remember in class we saw that (S-I) Ξ (G-T) +CAB)

Reference no: EM132198923

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