As a result of entering the world economy, Neverland experiences economic boom and its GDP goes up to y= 13250: The functions that describe consumption and investment are still the same: Cd(r) = 5000 – 1000r+0.25Y and 1ª(r) = 500 – 1800r + 0.2Y. The government wants to take advantage of growth and increases its expenditures to: G = 1900. What is Neverland's current account balance? Note: Type in your answer approximated to two decimal points, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard will automatically delete it and you should not do anything about it.

As a result of entering the world economy, Neverland experiences economic boom and its GDP goes up to y= 13250: The functions that describe consumption and investment are still the same: Cd(r) = 5000 – 1000r+0.25Y and 1ª(r) = 500 – 1800r + 0.2Y. The government wants to take advantage of growth and increases its expenditures to: G = 1900. What is Neverland's current account balance? Note: Type in your answer approximated to two decimal points, i.e., your answer must be of the form "999.99". I will not be able to fix correct answers that were entered incorrectly, such as "999.999" or "999,99" or "999". In case the last digit in the correct answer is zero, e.g., "999.90" or "999.00", Blackboard will automatically delete it and you should not do anything about it.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Discuss the role of budget surpluses and trade surpluses in national saving and investment
Q-3: B. The following graph shows a relationship between saving (S), investment (I) and world interest rate (r*); given that r*> r, where r is domestic interest rate. Graphically show and interpret the impacts of following policy measures on saving (S), investment (I), and net exports (NX):a) Change in fiscal policy at homeb) Change in fiscal policy abroadc) An increase in investment demand
What does it mean by "aggregate demand and aggregate supply" when pertaining to macroeconomic policy in an open economy?
do fast i will10 upvotes.
Consider an economy described by the following equations: Y=C+I+G+NX Y=10,000 G=3,500 T=2,300 C-600 + 4/5(Y-T) 1=1,100-60r NX-1,800-670€ r.-8. In this economy, private saving = rate public saving investment = national saving the trade balance and the equilibrium exchange. (please enter your answers in numerical value without any dollar sign, comma, or a decimal place.)
The exchange rate is the price of one currency in terms of another currency. An exchange rate specifies how many units of one country's currency equal one unit of another country's currency. Suppose the following table forecasts exchange rate data for March 16, 2020, in terms of Canadian dollars per unit of foreign currency. Use the information in the table to answer the questions that follow. NOTE: the options for the first drop down question are (CDN $274.10 or CDN1,824.15 or CDN 1,548.20 or CDN $548.20) the options for the second drop down question are (increases or decreases)
Consider a country with no capital mobility and flexible exchange rates. a. Solve for the exchange rate that clears the trade balance as a function of the level of income, Y. (Assume that the trade balance is in the form T =T, + øq– mY where øis a positive constant and q = (eP*/P)). b. Solve for the level of income as a function of all exogenous variables. In what way does the multiplier differ from all other open economy multipliers computed before?
Saving-Investment Diagram Real Interest Rate, r(percent Saving Curve Investment Curve DE F GH Desired Saving and Investment (in billions of dollars) Based on the Saving-Investment Diagram, if the world real interest rate is indicated by C, then the difference between values H and D measures the net capital outflow the difference between values H and F measures the trade deficit the difference between values H and D measures the trade deficit the domestic real interest rate is indicated by B none of the above
You have the following annual data for the New Zealand economy ($bn): GDP (Y) = 184 Gross National Disposable Income (Yd) = 171 Net exports of goods and services (NX) = 0 Private Consumption (C) = 106 Government consumption (G) = 34 Based on this data, complete the following paragraph (enter numbers only). Investment (I) is equal to $____bn. The current account SELECT (surplus or deficit) is equal to $_____bn. The capital account part of the balance of payments (which for the purposes of this question includes both capital and financial accounts) therefore shows a SELECT (surplus or deficit) of $_____bn. National savings is equal to $_____bn.
Create a graph using the loanable funds model illustrating the below explanation. An increased budget deficit triggers higher government borrowing, leading to heightened competition for available funds in financial markets and subsequently higher interest rates. These elevated interest rates discourage private investment and borrowing by businesses and individuals, a phenomenon known as "crowding out." Simultaneously, the higher interest rates can result in a stronger domestic currency, making exports relatively more expensive and imports cheaper. This dual impact worsens the trade deficit by reducing export competitiveness and increasing the attractiveness of imported goods, contributing to a broader economic imbalance.
KEYNESIAN OPEN-ECONOMY MODEL IN DYNAMICS This section contains questions about a Keynesian open-economy model: • Recall the static IS equation Y = C +I+ G+ X – M. In this section, we assume that the consumption, the investment and the government expenditure are parameters. The trade balance at year t (X – M) is a linear function of the exchange rate Q; and the income Y; such that: X – Mt = aQt – BY; – YYt-1 where a, B and Y are positive parameters. Derive the difference equation that describes the dynamic behavior of the income Y. | What is correct about the dynamic behavior of the model? Select one or more: Select one or more: The model implies that an increase in the income this year will immediately worsen the net export, keeping other things constant. The model implies that an increase in the real exchange rate will be followed by a series of income rises until a new equilibrium is reached. O It makes sense to assume that 2 < 1. 1+3 The model implies that the immediate multiplier…
Assume that a nation initially has an output level of 150 units per period and that consumption is also 150 (there is no investment or government spending). Suppose there is a temporary (i.e. one-period) increase in GDP of 16% in period 0. Assume the country has access to global financial markets with an interest rate of 8%. Assume an infinite time horizon for all questions. The United States has experienced large and growing current account deficits for more than 20 years, whereas Japan has experienced large and growing current account surpluses for roughly the same period. The U.S. economy has grown at faster rates than Japan's over the past 10 years. What might explain the difference? Relate your answer to the relationship between the current account, GNDI, and GDP.