During the Reagan era, 19811988, the U.S. current account moved from a tiny surplus to a large

During the Reagan era, 1981–1988, the U.S. current account moved from a tiny surplus to a large deficit. The following table provides U.S. macroeconomic data for that period.

a. Based on these data, to what extent would you attribute the changes in the U.S. current-account balance to a decline in the U.S. private saving-investment balance?

b. To what extent would you attribute the changes in the U.S. current-account balance to an increase in the U.S. government budget deficit?

c. Based on these data, what was the excess of national spending over national income during thisperiod?

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Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 Private saving Private investment 500 586 617 641 743 736 721 731 802 468 558 503 547 719 715 718 749 794 Government budget deficit330109 140-109 -125 -147-112-98 Current-account balance 2 5 45 -100-125151-167-129