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  • Card 6 / 9:
    Assume an economy has a budget surplus of 1,000, private savings of 4,000, and investment of 5,000.

    Write out a national saving and investment identity for this economy.What will be the balance of trade in this economy?If the budget surplus changes to a budget deficit of 1000, with private saving and investment unchanged, what is the new balance of trade in this economy?

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Source:  OpenStax, Macroeconomics. OpenStax CNX. Jun 16, 2014 Download for free at http://legacy.cnx.org/content/col11626/1.10
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