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i) Write down an equation to illustrate the links between the deficits/surpluses in the three sectors...

i) Write down an equation to illustrate the links between the deficits/surpluses in the three sectors of the economy (private, Government and foreign sectors).

(ii) During 2013 Ireland had an external Current Account surplus of about 4.4% of GDP. During the same year, the fiscal deficit was 2.3% of GDP. Using your equation, please calculate the balance in the private sector.

(iii) Comment on this situation.

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