Question: Answer True or False. Briefly explain your answer a)When the world interest rate is NEGATIVE a two-period economy CAN run perpetual current account deficits if

Answer True or False. Briefly explain your answer

a)When the world interest rate is NEGATIVE a two-period economy CAN run perpetual current account deficits if its initial net foreign asset position is negative.

b) A two-period economy that starts with a positive net international investment position (NIIP) will run a trade balance deficit at some point.

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