An economy with zero net exports is described below: C= 100 + 0.8 (Y – T)I p= 80G= 140NX= 0T= 170 The multiplier in this economy is 5. a. Find short-run equilibrium output.Instructions: Enter your responses as whole numbers. Short-run equilibrium output: b. Economic recovery abroad increases the demand for the country’s exports; as a result, NX rises to 100.Short-run equilibrium output (Click to select) increases decreases to .c. Assume that foreign economies are slowing, reducing the demand for the country’s exports, so that NX = -100. (A negative value of net exports means that exports are less than imports.)Short-run equilibrium output (Click to select) decreases increases to .d. Which of the following best describes the tendency of recessions and expansions to spread across countries?multiple choice Lower planned aggregate spending in one nation will reduce the amount of goods it exports abroad, thereby lowering the value of imports for its trading partners, which will reduce its short-term equilibrium output as well.Lower planned aggregate spending abroad will reduce the amount of investment that flows into domestic industries from other countries, thereby reducing domestic short-term equilibrium output.Lower planned aggregate spending abroad means that fewer goods will be exported from a specific nation, leaving more goods available for domestic consumption (C) in that nation, which will increase its short-term equilibrium output.Lower planned aggregate spending in a nation means less imports of foreign goods, thereby reducing the short-term equilibrium output of its trading partners through lower net export (NX) values in those nations.

Given: C = 100 + 0.8 (Y – T) I = 80 G = 140 NX = 0 T = 170 The multiplier in this economy is 5.The short-run equilibrium output can be calculated by: Y = C + I + G + NX Y = 100 + 0.8 (Y-170) + 80 + 140 Y = 100 + 0.8Y - 136 + 80 + 140 0.2Y = 184 Y = $920Economic recovery abroad increases the demand for the country’s exports; as a result, NX rises to 100 We know positive NX will add on to the GDP. Thus, Short-run equilibrium output increases to: Y = C + I + G + NX Y = 100 + 0.8 (Y-170) + 80 + 140 + 100 0.2Y = 284 New Y = $1,420 Since foreign economies are slowing, reducing the demand for the country’s exports so that NX = -100. We know negative NX will be subtracted from the GDP. Thus, Short-run equilibrium output decreases to: Y = C + I + G + NX Y = 100 + 0.8 (Y-170) + 80 + 140 - 100 0.2Y = 84 New Y = $420 Note: Hey, Thank you for the question. According to our policy, we can only answer 3 subparts per question. So, we are solving the 1st three for you. If you need further help, post the question again and mention the subpart you want us to solve.

Answered: An economy with zero net exports is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An economy with zero net exports is described below:

C	= 100 + 0.8 (Y – T)
I ^p	= 80
G	= 140
NX	= 0
T	= 170

The multiplier in this economy is 5.

a. Find short-run equilibrium output.

Instructions: Enter your responses as whole numbers.

Short-run equilibrium output:

b. Economic recovery abroad increases the demand for the country’s exports; as a result, NX rises to 100.

Short-run equilibrium output   (Click to select)   increases   decreases  to   .

c. Assume that foreign economies are slowing, reducing the demand for the country’s exports, so that NX = -100. (A negative value of net exports means that exports are less than imports.)

Short-run equilibrium output   (Click to select)   decreases   increases  to  .

d. Which of the following best describes the tendency of recessions and expansions to spread across countries?

multiple choice

Lower planned aggregate spending in one nation will reduce the amount of goods it exports abroad, thereby lowering the value of imports for its trading partners, which will reduce its short-term equilibrium output as well.
Lower planned aggregate spending abroad will reduce the amount of investment that flows into domestic industries from other countries, thereby reducing domestic short-term equilibrium output.
Lower planned aggregate spending abroad means that fewer goods will be exported from a specific nation, leaving more goods available for domestic consumption (C) in that nation, which will increase its short-term equilibrium output.
Lower planned aggregate spending in a nation means less imports of foreign goods, thereby reducing the short-term equilibrium output of its trading partners through lower net export (NX) values in those nations.

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