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    Likely Effect of Earthquake on Japan's Current Account

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    The devastating earthquake that hit Kobe, Japan on January 17, 1995 was estimated to cause about $100 billion in damage to the Japanese economy. What is the likely effect of this earthquake on Japan's 1995 current account? On its capital account? Explain.

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    The Kobe quake caused an increase in Japanese investment to replace the assets destroyed in the quake. Other things being equal, increasing ...

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