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Unformatted text preview: o Hyperinflation: extremely high inflation rate The international economy o Open: trade with other countries o Closed: doesnt trade with other countries o Trade imbalances Surplus: exports > imports Deficit: exports< imports o Most of years experienced trade surplus, after 1980s started to run a trade deficit. o Nov. 2009 trade balance: $36.4B (3% of GDP) o Keep running a trade deficit because we have a budget deficit. Large amounts of imports are for the government Macroeconomic policy o Fiscal policy: government spending and taxation o Monetary policy: Fed; money supply Major resource of government is taxes; typically runs a deficit (very high during war time) 1998-2001: budget surplus...
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