Readers Question: How important is the budget deficit? The budget deficit is the annual amount the government borrow. The government usually financed the budget deficit by selling bonds to the private sector To libertarian and free-market economists, budget deficits are liable to cause significant economic problems – crowding out of the private sector, higher interest …
The budget deficit is the annual amount the government has to borrow to meet the shortfall between current receipts (tax) and government spending. Net borrowing for the UK 2021/11 is £151.8bn or 14.8% of GDP [OBR – J511] National debt or public sector net debt – is the total amount the government owes – accumulated …
Readers Question I am confused by the statement that is written in my O level text book (Economics Author: Dan Moynihan; Brian Titley). It says that if the current account is in surplus the financial account will be in deficit. Is this true? Yes, it is true Firstly, the current account on balance of payments …
The current account on the balance of payments measures the inflow and outflow of goods, services, investment incomes and transfer payments. The main components of the current account are: Trade in goods (visible balance) Trade in services (invisible balance), e.g. insurance and services Investment incomes, e.g. dividends, interest and migrants remittances from abroad Net transfers …
Readers Question: how does a current account surplus affect domestic employment? A current account surplus means an economy is exporting a greater value of goods and services than it is importing. A country with a current account surplus will have a deficit on the financial/capital account. i.e. a country with a current account surplus will …
A trade deficit occurs when the value of imports of goods and services is greater than the value of exports. For example, in 2016 the US exports totalled US$ 1,450,457 million. Imports totalled US$ 2,248,209 million. (WITS) Source: Trade balance at St Louis Fed. Since 1990, the US has run a persistent trade deficit. The …
Readers Question: I’m currently reading ‘Crisis Economics’ (by N.Roubini) at the moment and I don’t get some stuff in the book. When it was talking about the current account balance, the book referred to it as a balance between national savings and national investment, but I don’t quite understand this. The Current account on the …
Readers Question: Can you please discuss the nature of the current account deficit and the exchange rate in the UK along with the theory that would suggest there is a relationship between the exchange rate and the current account. A current account deficit implies the value of imports of (goods/services/investment incomes) is greater than the …