Page 44 - FINAL CFA SLIDES DECEMBER 2018 DAY 5
P. 44
Session Unit 4:
16. Aggregate Output, Prices & Economic Growth, p.52
LOS 16.e: Explain the fundamental relationship among saving, investment, the fiscal balance, and the trade
balance....p.56
But TE = TI
If G – T > 0 : government deficit, then this must be financed by:
• S – I > 0 : Excess of private saving over private investment; and/or
• X – M < 0 : Trade deficit (G could have borrowed from abroad/imported)
