Question

From Mexico's Balance of Payments: The Current Account Balance (CAB) + the Financial Account Balance (FAB) = 0. The CAB, (X - IM) = (S - I) + (T - G), is the measure of net domestic savings. The FAB is the measure of net international foreign borrowing or lending. Suppose Mexico has: Private savings: S = $750 Private investment: I = $750 Government spending: G = $200 Government net taxes: T = $200 a) What is the current and financial account balance? The current account balance would be $0 and the financial account balance would be $0. b) Suppose, other things being equal, private sector savings were to decrease by $40 to $710. Note: Keep $0 for the second part if you think there is no change. The current account balance would (select one) by $0 and the financial account balance would (select one) by $0. c) Alternatively, with initial private savings of $750, other things being equal, suppose government spending decreased by $20, creating a budget surplus Note: Keep $0 for the second part if there is no change. The current account balance would (select one) by $0 and the financial account balance would (select one) by $0. Official Time: 23:26:57 SUBMIT AND MARK

          From Mexico's Balance of Payments:
The Current Account Balance (CAB) + the Financial Account Balance (FAB) = 0.
The CAB, (X - IM) = (S - I) + (T - G), is the measure of net domestic savings.
The FAB is the measure of net international foreign borrowing or lending.
Suppose Mexico has:
Private savings: S = $750
Private investment: I = $750
Government spending: G = $200
Government net taxes: T = $200
a) What is the current and financial account balance?
The current account balance would be $0 and the financial account balance would be $0.
b) Suppose, other things being equal, private sector savings were to decrease by $40 to $710.
Note: Keep $0 for the second part if you think there is no change.
The current account balance would (select one) by $0 and the financial account balance would (select one) by $0.
c) Alternatively, with initial private savings of $750, other things being equal, suppose government spending decreased by $20, creating a budget surplus
Note: Keep $0 for the second part if there is no change.
The current account balance would (select one) by $0 and the financial account balance would (select one) by $0.
Official Time: 23:26:57
SUBMIT AND MARK

From Mexico's Balance of Payments:
The Current Account Balance (CAB) + the Financial Account Balance (FAB) = 0.
The CAB, (X - IM) = (S - I) + (T - G), is the measure of net domestic savings.
The FAB is the measure of net international foreign borrowing or lending.
Suppose Mexico has:
Private savings: S = 750
Private investment: I =750
Government spending: G = 200
Government net taxes: T =200
a) What is the current and financial account balance?
The current account balance would be 0 and the financial account balance would be0.
b) Suppose, other things being equal, private sector savings were to decrease by 40 to710.
Note: Keep 0 for the second part if you think there is no change.
The current account balance would (select one) by0 and the financial account balance would (select one) by 0.
c) Alternatively, with initial private savings of750, other things being equal, suppose government spending decreased by 20, creating a budget surplus
Note: Keep0 for the second part if there is no change.
The current account balance would (select one) by 0 and the financial account balance would (select one) by0.
Official Time: 23:26:57
SUBMIT AND MARK

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