Causes and Consequences of a Current Account Deficit

Causes and Consequences of a Current Account Deficit - An understanding of the Causes and Consequences of a Current Account Deficit looking at causes from the demand and supply side of the economy
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[@Jackr889]

don't stop bro everyone here loves you, sooooo grateful for your videos

[@reettata]

Thanks so much for all the effort, the examples you state in your videos are so helpful!

[@sergioconradcaldera5056]

Thank for the incredible video!

[@alfiejones3088]

You’re the definition of amazing

[@rashad862]

Is he the next Sal Khan?

[@Gymboy.747]

Not me watching you one day before my o level send ups for extra information.

[@AlokJadva]

Thing I’m confused about is that (X-M) and unemployment is already decreasing so it’s not like CA deficit is causing it. It’s just a measure that’s showing what’s happening right

[@anindadatta164]

Normally I is constrained by S, However increasing CAD can increase I beyond the level of S, thus keeping AD constant. The increased I can push the LAS curve towards right, thus controlling inflation.

[@oddyorozuya6958]

I love u that’s my confession and take my flowers 💐

[@JimJam-ju6vn]

beautifully explained!!!! thankyou so much

[@roshanafernando2443]

Thanks sir. Well explained.

[@JasperLeeming-xx4fi]

what would a high current account deficit : gdp ratio be ? thanks

[@grgn7786]

If a current account deficit means decrease in growth and increase in unemployment rate, how come that the US and the UK both have a low unemployment rate? Is it because we assume that their GDP is not affected much by the current account deficit?

[@ric6383]

Many thanks.

[@edinimusic]

Thankyou

[@pawansahani1660]

Why is some countries BOP in surplus, in spite of huge trade deficit?

[@EconplusDal]

Pawan sahani Other components of the current account might be in large surplus(the income balances). Furthermore, perhaps the financial/capital accounts of the BoP are in large surpluses offsetting a trade deficit

[@pawansahani1660]

Thank you so much for your guidence .hope we will have more discussion on near future

[@jimlite8568]

what is the disadvantage of current account surpluses?

[@sandevweerasinghe4014]

increase govt. expenditure leading to inflation

[@jonnymee5659]

So you say AD decreases due to (X-M) being negative which therefore drags down AD etc etc but !!! CA deficit causes a decrease in the exchange rate (because supply of pounds increases to buy more foreign goods which decreases the price of pounds) so the pound is weak (WPIDEC) therefore demand for imported goods will decrease as theyre more expensive, and AD shifts right due to an increase in demand for domestically produced goods (imports relatively more expensive now) and also an increase in export demand as they're cheaper for foreign consumers. So therefore a CA deficit may Increase in AD causing demand pull inflation, economic growth, employment and overall would automatically improve the current account balance of payments due to a depreciation of the domestic currency as a result of the initial CA deficit. if you read this, is this wrong?

[@EconplusDal]

It's all about which effect dominates and which one comes first. Most like the AD left idea will happen first. Exchange rate adjustment and then benefit can take time

[@jonnymee5659]

thanks alot ! i would just use my little theory as a long term evaluation i think

[@jeremyfrost4078]

MY FUCKING G

[@BliiiiBlaaaaBluuuub]

whats ulc

[@Jmeadows5g]

unit labour costs

[@SuperRetarded2]

I predict this will come up in the 2015 paper

[@williambond5880]

did it?

[@montyrichmond446]

did it?

[@mingli7997]

such a good teacher, thank you

[@nisithshubhankar751]

I come to your videos even if I understand the topic. There's always something new to learn. Thanks a lot, sir.

[@-MichelleM]

"donkey years." LOL!

[@hiitsmeb7445]

Lol

[@EternalShadow1667]

Lol

[@danielbailey5024]

Lol

[@montyrichmond446]

lol

[@zoopsquad4931]

@@montyrichmond446 haha were having the exam tomorrow arent we?

[@taihungau8696]

Please do A2!

[@karfar8029]

Okay, the United States of America has a trade deficit, this requires a federal fiscal deficit to fuel the leakages to the foreign sector. Is a federal deficit an issue though? No, not really. I would argue that the federal deficit aught to actually be higher. As it stands, real dollars, Dollars created through federal spending and injected into the private sector only accounts for 3% of the money supply. 97% of the money supply is private debt that needs to zero out plus interest whereas real dollars simply exist as an asset and does not need to zero out or have interest applied to it's existence. Private debt is inherently inflationary. Using the deficit compared to GDP is a completely useless measure. See Japan as proof of this. No, you cannot use Greece as a comparison as they are currency clients and not a currency issuer. It's apples and oranges.

[@saquibalikhan7191]

When you drew the diagram for Current A/c deficit, you only showed the AD curve shifting left. Would that only be caused by Demand side factors? And can AS curve also shift left indicating Current A/c deficit? Will THAT be caused by Supply-side factors?

[@darthforexvader7201]

hi what is the best resources online for finding out up-to-date balance of trade info for trading FX please? (thank you)

[@toms4669]

could you evaluate by talking about state of the economy? if you're producing where AS is vertical (near full emplyoment) a deficit will not reduce production by much but will reduce prices etc..

[@aleahs7234]

Nice video may I ask what exam board are you doing and is it possible if you can do test questions and answer them?

[@rohitbanga6423]

Why is the aggregate supply line actually curved? I thought is must be in a straight line? What's the difference between SRAS and AS line on the diagram?

[@AmirHussain-fq6uu]

Keynesian and classical diagrams

[@sameerkhanhassanzada8750]

good vid

[@ziaur7861]

Would they ask us to define donkey years? hahaha only messing

[@Grandfinal43]

shit joke tbf

[@ballinbadger8635]

Shit sense of humour tbf

[@ziaur7861]

How can you even be asked to reply

[@OllieChapman]

sometimes find it useful to think: Strong Pound, Imports Cheap, Exports Expensive (SPICEE)

[@wallopwallop9125]

Ollie & Francesca Chapman hell no spice is da 🐐

[@Suraj-so3ge]

DONKEY YEARS xdddd

[@wallopwallop9125]

Suraj it’s just a saying fam