An increase in the Pakistan's government budget deficit ?
Correct answer: B. decreases Pakistan's net exports and Pakistan's net Capital outflow the Pakistan's same amount
- A. Increase Pakistan's net exports and decrease Pakistan's net capital outflow
- B. decreases Pakistan's net exports and Pakistan's net Capital outflow the Pakistan's same amount
- C. Increase Pakistan's net exports and Pakistan's net capital outflow the same amount
- D. decreases Pakistan's net exports and increase Pakistan's net capital outflow
Explanation
A government budget deficit reduces national saving, leaving fewer domestic funds for investment at home and abroad. Consequently, net capital outflow and net exports both decrease by the same amount, assuming investment is unchanged.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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