5. The data in columns I and 2 in the accompanying table are for a private closed economy: LO6 (1) (2) Aggregate Expenditures, Private Closed Economy, (6) Aggregate Expenditures, Private Open Economy, Real Domestic (5) Output (GDP = DI), (3) Exports, (4) Imports, Net Еxports, Billons BIllons BIlons BIlons BIlons Billons $200 $240 $20 $30 250 280 20 30 300 320 20 30 350 360 20 30 400 400 20 30 450 440 20 30 500 480 20 30. 550 520 20 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 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?
5. The data in columns I and 2 in the accompanying table are for a private closed economy: LO6 (1) (2) Aggregate Expenditures, Private Closed Economy, (6) Aggregate Expenditures, Private Open Economy, Real Domestic (5) Output (GDP = DI), (3) Exports, (4) Imports, Net Еxports, Billons BIllons BIlons BIlons BIlons Billons $200 $240 $20 $30 250 280 20 30 300 320 20 30 350 360 20 30 400 400 20 30 450 440 20 30 500 480 20 30. 550 520 20 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 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?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:**Table for a Private Closed Economy:**
| (1) Real Domestic Output (GDP = DI), Billions | (2) Aggregate Expenditures, Private Closed Economy, Billions | (3) Exports, Billions | (4) Imports, Billions | (5) Net Exports, Billions | (6) Aggregate Expenditures, Private Open Economy, Billions |
|-----------------------------------------------|------------------------------------------------------------|----------------------|----------------------|--------------------------|------------------------------------------------------------|
| $200 | $240 | $30 | | | |
| $250 | $280 | $30 | | | |
| $300 | $320 | $30 | | | |
| $350 | $360 | $30 | | | |
| $400 | $400 | $30 | | | |
| $450 | $430 | $30 | | | |
| $500 | $460 | $30 | | | |
| $550 | $480 | $30 | | | |
**Tasks and Questions:**
a. Use columns 1 and 2 to determine the equilibrium 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 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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