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Current Account Deficit (CAD):
Boon or Bane The general belief is that high CADs are dangerous. In general, this is correct. But the converse that low CADs are good is not. As seen above, a CAD is nothing but a measure of a country's savings gap, i.e., the excess of investment over savings. It represents the net transfer of resources from the rest of the world to the country running the deficit. Therefore, in a developing country, with a huge needs for funds for investment, a CAD makes sense. It allows it to finance investments that would have been well beyond what it could hope to finance with its own savings. On the flip side, CADs are to be financed by foreign capital inflows. The capital flows are fickle, can be reversed, and have to be serviced. The right CAD for any country, therefore, depends on its ability to absorb and service capital inflows. If these resources can be deployed productively and in ways that enhance its ability to repay, a high CAD to GDP ratio is nothing to worry about. But if they cannot, then it is inviting trouble. Too high a ratio canprove unsustainable in the long run as it did in East Asian economies in 1998and in Mexico earlier.
To that extent low ratio has its advantages. But, very low ratio carries with it an opportunity cost?of not being able tobenefit from resources that could be drawn from outside.
DIMENSIONS OF UNEMPLOYMENT: What is the level of unemployment in the country? According to the 1999-2000 Survey of NSSO, the number of unemployed has increased from 20.13 mill
why does gap between the ATC curve and the AVC curve decreases as the level of output increases
FIXED EXCHANGE RATE SYSTEM: National currencies are generally acceptable within the geographical boundaries of a country. As such, trade between countries typically involves
short run equilibrium of the industry
Crumble Corporation produces cookies. Here is the relationship between the number of workers and output (in dozens of cookies) in a given day: Workers Output Marginal Product T
determination of optimal solution mathematical presentation
AS STUDENT OF ECONOMICS ELABORATE ON THE KALDOR-HISCKS COMPENSATION
LANTHENOIDS
Consider a decision faced by a cattle breeder. The breeder must decide how many cattle he should sell in the market each year and how many he should retain for breeding purposes.
IS Mn3O4 basic or amphoteric.
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