The long-run budget constraint is the idea that a country must live within its means, hence limiting the amount a country can borrow.
A country can only exploit foreign financial markets to a certain extent to increase domestic investment or consumption.
What forms the primary cornerstone of international trade?
The presence of government policies, variations in technology, variations in resource endowments, variations in demand, and the presence of economies of scale are the five primary drivers of international commerce. In most trade models, there is only one trade-related motivator.
Describe an externality.
An externality is a cost or benefit brought about by a producer but not borne by or received by that producer. A good or service's creation or consumption can lead to externalities, which can be both beneficial and harmful.
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