1. For this small open economy, output = $25 m, government purchases = $6 m, and net factor payments rw Cd d 5% $12 m $3 m 4% $13 m $4 m 3% $14 m $5 m 2% $15 m $6 m For each rw, calculate national saving, foreign lending, and absorption. Calculate net exports as the difference between output and absorption. What is the relationship between net exports and foreign lending?
1. For this small open economy, output = $25 m, government purchases = $6 m, and net factor payments rw Cd d 5% $12 m $3 m 4% $13 m $4 m 3% $14 m $5 m 2% $15 m $6 m For each rw, calculate national saving, foreign lending, and absorption. Calculate net exports as the difference between output and absorption. What is the relationship between net exports and foreign lending?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter23: The International Trade And Capital Flows
Section: Chapter Questions
Problem 12SCQ: If a country is running a government budget surplus, why is (T - G) on the left side of the...
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