Imagine an economy in which Ricardian equivalence holds. This economy has a budget deficit of 50, a
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Imagine an economy in which Ricardian equivalence holds. This economy has a budget deficit of 50, a trade deficit of 20, private savings of 130, and investment of 100. If the budget deficit rises to 70, how are the other terms in the national saving and investment identity affected?
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Ricardian equivalence means that private saving changes to of...View the full answer
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