Given the saving, investment and current account balance identity S=I+ (G-T)+CA in the open economy, explain...

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Given the saving, investment and current account balance identity S=I+ (G-T)+CA in the open economy, explain what is called "Twin Deficit" of budget deficit and trade deficit. If a country's government spends more than its tax revenues, with very low level of local private saving, what will happen according to this identity ? 25% Given the saving, investment and current account balance identity S=I+ (G-T)+CA in the open economy, explain what is called "Twin Deficit" of budget deficit and trade deficit. If a country's government spends more than its tax revenues, with very low level of local private saving, what will happen according to this identity ? 25%

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Step 12 Step1 The twin deficit refers to the situation in which a country has both a bu... View the full answer