Sectoral Accounting 7. Suppose an economic system composed by two countries, A a

Question

Sectoral Accounting 7. Suppose an economic system composed by two countries, A and B, that have commercial relationships between them. a. In period 1, country A is running a surplus in its CAB, then country B is running a deficit in its CAB. Besides, country A is running a surplus in its government sector, meanwhile country B is running a deficit in its government sector. Use the four quadrant framework to show in two graphics the sustainable surplus for the private sector in each economy. What is the sustainable space that the policy makers have to act in each economy? Explain b. In period 2, policy makers of country B decide to implement policies that bring a surplus in its CBA, affecting country A. On the other hand, although country A is running a surplus in its governnnent sector, they decide to implement a fiscal rule of 4% of its GDP, that is, the government cannot run a deficit beyond the 4% of its GDP. Use the

Explanation / Answer

(A.) The four-quadrant model, divided into severity for each disorder:

Quadrant I: Low MH-Low SA, served in primary care

Quadrant II: High MH-Low SA, served in the MH system

Quadrant III: Low MH-High SA, served in the SA system

Quadrant IV: High MH-High SA, served by a fully integrated system

(B.) Economic sustain ability means maximum society’s well-being, economic equity, and remove poverty through the creation of wealth and livelihoods, equal access to resources, and the optimal and efficient use of natural resources. Environmental deterioration, lawless, Social divisions, Poor low capacity, Poor economic performance and limited fiscal resource. This is policy maker of act in each economy.

(C.) A data set compiled by the Fiscal Affairs Department of the IMF identifies countries’ adoption of fiscal policy restrictions. 1 Only five countries had fiscal rules in place in 1990, more than 80 by 2014. National fiscal rules are used for very comman use for help of public finances.

Fiscal rules are only one element of fiscal reform. Currently many countries-industrial and emerging economies like-are designing framework for fiscal policy. These reforms are motivated by different reasons. They are grow our global agreement among departments and policy makers about the economics profit of procedures and rules that shape and limit planning

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