Question

In 2019, Brazil's trade deficit as share of GDP widened. In that year, government deficit as share of GDP declined and investment as share of GDP remained constant. What must have happened to private savings as share of GDP?

Answer 1

Answer:

The private savings as a share of the GDP must have declined.

Explanation:

according to the twin deficit hypothesis:

budget deficit = savings + trade deficit - investments

the government deficit as a share of GDP declined and investment as a share of GDP remained constant that means that the savings should decline.