Page 40 - FINAL CFA I SLIDES JUNE 2019 DAY 5
P. 40

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)
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