(2)Consider the following hypothetical economy: GDP = 2,000; consumption (C) =1,400; investment (I) = 250; government spending (G) = 200. Calculate theabsorption for the hypothetical economy.(3)Calculate the domestic spending for the hypothetical economy(4)Will the trade balance of the economy improve or deteriorate?(5)Now suppose that consumption has increased to 1,600. Calculate the absorption.(6)Will the trade balance of the economy improve or deteriorate?

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Answered: (2) Consider the following hypothetical…

(2) Consider the following hypothetical economy: GDP = 2,000; consumption (C) 1,400; investment (I) 250; government spending (G) = 200. Calculate the absorption for the hypothetical economy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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