The trade deficit is the mechanism allowing consumption and


 "The trade deficit is the mechanism allowing consumption and investment in the U.S. to grow faster than in Europe and Japan. The issue for the U.S. is whether it's worth the interest costs. It's the same question facing a small business: Should it borrow money to expand the payroll, train employees, buy land and machines, conduct R&D, build inventory? Profit and credit-worthiness help make the decision." (Malpass, David. "Embrace the Deficit," Wall Street Journal. Dec 21, 2006. pg. A.16.) What information would you need to decide whether or not the foreign borrowing necessary to finance the U.S. current account deficit is "worth the interest costs?

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Macroeconomics: The trade deficit is the mechanism allowing consumption and
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