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    I was a bit stuck so I thought i'd post it herexplain the effects on real gdp and price level of a deteriorating balance of trade in goods and services (larger deficit). I was thinking AD would shift left meaning that on a lras curve the gdp would fall and so would price levels.For evaluation I was thinking that the other complainants of AD would play a factor But I need more since its 12 marks
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    (Original post by DedeM9)
    I was a bit stuck so I thought i'd post it herexplain the effects on real gdp and price level of a deteriorating balance of trade in goods and services (larger deficit). I was thinking AD would shift left meaning that on a lras curve the gdp would fall and so would price levels.For evaluation I was thinking that the other complainants of AD would play a factor But I need more since its 12 marks
    It also depends on what could be causing the current account deficit, it could be caused by excessive economic growth or lack of competitiveness, not an issue if importing capital equipment
 
 
 
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