The private sector balance and the government sector balance tend to move in _______ .Net exports respond _______.

Question

Quizplus · Accepted Answer

The private sector balance and the government sector balance often move in opposite directions because when the government spends more (deficit), it typically leads to increased income and spending in the private sector (surplus), and vice versa. Net exports respond to the sum of the government sector and private sector balances, as these combined balances affect the country's savings and investment dynamics, influencing the trade balance.

The Private Sector Balance and the Government Sector Balance Tend