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Questions

FA25 ECON 302 002 Homework #11 (International Trade)

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Economic theory tells us that countries that grow faster than the global economy as a whole should run a trade [ Select ] surplus deficit , but some of them do not. What do (at least some of) these countries that violate this "rule" have in common? They have [ Select ] rapidly growing populations rapidly aging populations high birth rates and therefore they save [ Select ] more less then they invest.

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The question asks us to identify common features of countries that grow faster than the global economy but don’t conform to the usual rule about trade outcomes. First, consider the trade outcome: the blank here should be filled with a term that describes a country’s international trade balance when growth outpaces the world average. If a country grows rapidly relative to the world, one expects it to run a deficit in many cases because investment dema......Login to view full explanation

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