Question: Choose the one alternative that best completes the statement or answers the question and explain your reasoning. Do not forget to include equations, graphs, or

Choose the one alternative that best completes the statement or answers the question and explain your reasoning. Do not forget to include equations, graphs, or any other material you believe is needed to understand your choice.

2. Suppose that the trade balance, the income balance and the net unilateral transfers are all different from zero. Define the domestic absorption in period : as A = Of+ I, + G. In that case, the current account in period t can be obtained by which of the following equations (only one is correct): (a) CAt = GNI - At (b) CA. = GDP - At 2 (c) CA. = GNDI - At (d) CA. = GNDI + A (e) CA, = GDP + At (f) CA. = GNI + At

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