5. The data in columns 1 and 2 in the accompanying table are for a private closed economy: LO6 (2) Aggregate Expenditures, Private Closed Economy. (6) Aggregate Expenditures, Private Open Economy, Real Domestic (5) Net Output (GDP = DI), (3) Exports, (4) Imports, Еxports, Billons BIIlons BIllons BIllons BIllons BIllons $200 $240 $20 $30 250 280 20 30 300 320 20 30 350 360 20 30 400 400 20 30 450 440 20 30 500 20 30 550 520 20 30 a. Use columns 1 and 2 to determine the cquilibrium GDP for this hypothetical economy. b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in columns 5 and 6 and determine the "equilibrium GDP for the opcn economy: What is the change in equilibrium GDP caused by the addition of net exports? c. Given the original $20 billion level of exports, what would be net exports and the equilibrium GDP if imports were $10 billion greater at each level of GDP? d. What is the multiplier in this example?
5. The data in columns 1 and 2 in the accompanying table are for a private closed economy: LO6 (2) Aggregate Expenditures, Private Closed Economy. (6) Aggregate Expenditures, Private Open Economy, Real Domestic (5) Net Output (GDP = DI), (3) Exports, (4) Imports, Еxports, Billons BIIlons BIllons BIllons BIllons BIllons $200 $240 $20 $30 250 280 20 30 300 320 20 30 350 360 20 30 400 400 20 30 450 440 20 30 500 20 30 550 520 20 30 a. Use columns 1 and 2 to determine the cquilibrium GDP for this hypothetical economy. b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in columns 5 and 6 and determine the "equilibrium GDP for the opcn economy: What is the change in equilibrium GDP caused by the addition of net exports? c. Given the original $20 billion level of exports, what would be net exports and the equilibrium GDP if imports were $10 billion greater at each level of GDP? d. What is the multiplier in this example?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:5. The data in columns 1 and 2 in the accompanying table are for a private closed
economy: LO6
(1)
Real Domestic
Output
(GDP = DI),
(2)
Aggregate
Expenditures, Private
Closed Economy,
(6)
Aggregate
Expenditures, Private
Open Economy,
(5)
(3)
Exports,
(4)
Imports,
BIllons
Net
Exports,
BIIllons
BIllons
BIllons
Billlons
BIllons
$200
$240
$20
$30
250
280
20
30
300
320
20
30
350
360
20
30
400
400
20
30
450
440
20
30
30
500
480
20
550
520
20
30
a. Use columns 1 and 2 to determine the cquilibrium GDP for this hypothetical
economy..
b. Now open up this economy to international trade by including the export and
import figures of columns 3 and 4. Fill in columns 5 and 6 and determine the
equilibrium GDIP for the open economy: What is the change in equilibrium GDP
caused by the addition of net exports?
c. Given the original $20 billion level of exports; what would be net exports and the
equilibrium GDP if imports were. $10 billion greater at each level of GDP?
d. What is the multiplier in this example?
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