The study looked at how a developing country like Pakistan deals with deficits in its government spending and trade. By using a special model, the researchers found that when the government spends more than it earns, it leads to a trade deficit. They also discovered that a higher exchange rate can help improve both the trade balance and current account balance in the long run. However, having a more open economy can make the current account balance worse. To fix a big trade deficit, the government needs to reduce its spending and have supportive monetary policies.