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Free response question

Macroeconomics · Hard · 30 marks

IEO past paper: 2018 International Economics Olympiad, open questions

During his lecture at Sberbank Corporate University, Ilya Androsov was talking about countries that find themselves in a situation of current account deficit.

(a)Using the example of Turkey, explain why this deficit can be detrimental to economic growth.[15](b)Can you tell a story where such current account deficit can be beneficial for the economy of the country?[15]

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