Question: How do changes in the government expenditures affect the current account? . Increase in G1 of AG1 . Recall aggregate resource constraint C2 = (1

How do changes in the government expenditures affect the current account?

How do changes in the government expenditures affect the current account? . Increase in G1 of AG1 . Recall aggregate resource constraint C2 = (1 + r) [Q1 - G1 - C1] + Q2 - G2 . How C1, C2 change relative to AG1? and ACA? Recall ACA1 = -AC1 - AG1

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