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Current Account Deficit (cause (inablitlty to compete, world recession,…
Current Account Deficit
cause
inablitlty to compete
world recession
protectionst policies
supply shock
economic growth +development
consequence
Financial Acc. deficit
capital account deficit
AD
debt
interest payment
currency depreciates
solution
expenditure reducing
contractionary fiscal policy
cost of borrowing up, C + I down,
hot money means currency appreciates
contractionary monetary policy
advantages, disadvantages
expenditure switching
switching from foreign investment to domestic investment
protectionist policies
tariffs, quota
exchange rate manipulation
devalue
if marshals learner condition applies
J curve effect
supply side policies