Consider a small open economy. The saving curve is given by sd(r..) = 100 +2000r wThe investment curve is given by dr...) = 300 – 1000r w Let theinterest rate by 5%. Then the economy's current account balance isа. -50b. 50С. -200d. 200

Given Sd = 100 + 2000r Id = 300 – 1000r Interest rate = 5 % As rate of 5 %, Sd = 100 + 2000(0.05) =…

Answered: Consider a small open economy. The…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Assume that an open economy with a floating exchange rate is described by the equations:C = 0.5(Y-T)T= 1000I= 1500 -250rG= 1500NX= 1000 – 250e(M/P)d = 0.5Y – 500rM= 1000S-I= 500 – 250rP= 2r* = 1a. Derive the equation for the IS* curve. b. Derive the equation for the LM curve. c. Solve for equilibrium Y
Suppose that the government decides to cut spending. In a three graphs diagram, show theimpact of this policy on real interest rate, national saving, investment, net capital outflows,demand for currency (NX), and supply of currency? Will the currency appreciate ordepreciate?
An open economy with absolute mobility of capital is described as follows: consumption function is given as C = 50 +0, 8(Y - T), where Y is output, and T is net taxes, Investment function is given as I = 20-10i, where I is nominal interest rate. Government spending G 22-4E+0, 3Y where E - nominal exchange rate (price of foreign currency in terms of domestic currency). For one unit of foreign currency, you can get 3 units of domestic currency. The real money supply is M* /P= 50. The demand for real money is described by the following function: L(Y,i) = 0, 5Y-10i. 20, tax Tr = 10, export Ex = 6E +10, import Im %3D Find BP curve, if the economy is initially in the internal and external equilibrium. Write an equation for BP without spaces and % signs
Sub : EconomicsPls answer very fast.I ll upvote. Thank You a small open economy is described by the following equations: C = 50 + .75(Y-T) I = 200 - 20r NX = 200 -50e M/P = Y -40r G = 200 T = 200 M = 3000 P = 3 r* = 5 a. Derive and graph the IS* and LM* curves. b. Calculate the equilibrium exchange rate, level of income, and net exports c. Assume a floating exchange rate. Calculate what happens to the exchange rate, the level of income, net exports and the money supply if the government increases spending by 50. Use graph to illustrate what you find. d. Now assume fixed exchange rate. Calculate what happens to the exchange rate, the level of income, net exports and the money supply if the government increases spending by 50. Use graph to illustrate what you find.
National saving is equal to Y-T-C. Oa. True Ob. False
When considering two countries, if the currency of one country appreciates, then in all cases, the currency of the other country___________?Group of answer choices 1Appreciates. 2What will happen to the currency of the other country is uncertain. 3Gains value. 4Depreciates.

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Consider a small open economy. The saving curve is given by sª(r„) = 100 + 2000rw The investment curve is given by /dr..) =300 – 1000r w Let the interest rate by 5%. Then the economy's current account balance is a. -50 b. 50 C. -200 d. 200