If a Country Has a Current Account Deficit, This Is

question 17

Essay

If a country has a current account deficit, this is often referred to as a situation where the country is "spending beyond its means." What does this phrase mean in terms of the simple Keynesian model? Does the existence of the current account deficit imply that the country as a whole is a dissaver (i.e., that saving is actually negative)? Why or why not?

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Definitions:

Controlled Events

Situations or occurrences that are directly managed or governed by someone or something to ensure a desired outcome.

Classical Conditioning

A learning approach that consists of pairing two stimuli together repeatedly; a reaction that is originally elicited by the second stimulus is at last elicited by the first stimulus alone.

CS

Commonly refers to a "Conditioned Stimulus," an initially neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response in classical conditioning.

Sexual Arousal

A physiological and psychological state of being awakened to sexual desire and readiness for sexual activity.