There Is an Intimate Relationship Between a Country's BCA and How

There is an intimate relationship between a country's BCA and how the country finances its domestic investment and pays for government expenditures.This relationship is given by BCA $\equiv$ X - M $\equiv$ (S - I) + (T - G) .Given this,in order for a country to reduce a BCA deficit,which of the following must occur?

A) For a given level of S and I, the government budget deficit (T - G) must be reduced.
B) For a given level of I and (T - G) , S must be increased.
C) For a given level of S and (T - G) , I must fall.
D) All of the above would work to reduce a BCA deficit.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free