Problem:
Econoland runs a current account deficit of $100 billion in a given year. Explain what must have happened to the financial account and Econoland’s international investment position. Specifically explain how the financial account and Econoland’s international investment position are related.
Q1. Why is does most of the worlds’ international trade take place between similar developed countries?
Q2. What are some examples of creative destruction? Describe and discuss their benefits or costs to human welfare?