Current and capital account deficit
Exhibit 3.3 states that in year 1991, the U.S. had current account deficit and consecutively a capital account deficit. Explain about how this may occur?
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In year 1991, U.S. has experienced an overall BOP deficit that should have been accommodated by Federal Reserve’s official reserve action which means decreasing down its reserve holdings.
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Problem 1. The manager of Joe's Menswear has noticed that over the past two holiday seasons their usual sales strategy of marking down prices has not been yielding the boost in revenues that it once did. JM sell men's suits, dress shirts,
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