Question: Explain why X - IM = (S - I) - (G - T). Now multiply both sides of this equation by 1 to get IM

Explain why X - IM = (S - I) - (G - T). Now multiply both sides of this equation by –1 to get
IM - X = (I - S) + (G - T)
And remember that the trade deficit, IM - X, is the amount we have to borrow from foreigners to get
Borrowing from foreigners = (I - S) + (G - T)
Explain the common sense behind this version of the fundamental equation.

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