please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly Consider an open economy, where the goods market is in equilibrium when the domestic output equals the domestic and foreign demand for domestic goods.VariableConsumptionInvestmentGovernment spendingBehavioral equations ($)0.65Y+4500.4Y-850r+6004,000Imports0.2Y+ 300Exports0.5Y -725€Taxes0.35YReal exchange rate0.7Foreign output0.45YReal interest rate4%Suppose the real exchange rate increases to 0.75.The new value of net exports is $-72.48. (Round your answer to two decimal places.)

Equilibrium in an Open EconomyIn an open economy, equilibrium is achieved when the domestic output…

Answered: Consider an open economy, where the…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Open-Economy Macroeconomics: Basic Concepts

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ProblemYou are given the following information about an open economyGross private domestic investment:40Government purchases of goods and services:30Gross national product(GNP):200Current account balance:-20Taxes:60Government transfer payment to the domestic private sector:25Interest payments from the government to the domestic privatesector:15Factor in come received from the rest of the world:7Factor payments made to the rest of the world:9Calculate the following:a)Consumptionb)NetExportsc)GDPd)Net factor payments from abroade)Private savings (f) Government savings (g) National savings
Q3-14 If a country's currency's external value is tied or pegged to the currency values of the country's leading trading partners, this arrangement is known as a Select one: a. peg against the SDR. b. managed float. c. peg against a "basket" of currencies or a "composite." d. currency board.
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If domestic Investment increases, and there is no change in the amount of private and public saving, what must happen to the size of the trade deficit?
Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?
REAL INTEREST RATE The following graph shows the market for loanable funds in Ouvert, a large open economy. The government of Ouvert has just instituted a tax cut, increasing the deficit. tudy Tools On the graph, shift either the demand curve or the supply curve to illustrate the change in fiscal policy. ns ress Tips cess Tips FOR YOU Domestic Saving StudyHu y Tools Supply Demand for Principles of Supply ··. e Feedback Demand O Type here to search 341 PM 89 F AQI 107 7/25/2021
Please no written by hand and no emage Consider an open economy, where the goods market is in equilibrium when the domestic output equals the domestic and foreign demand for domestic goods. a. Variable Behavioral equations ($) Exports 0.3Y*-200e Imports 0.1Y+300e Real exchange rate 0.45 Total output 1,000 Foreign output 500 Savings 9,44Yd+300 Taxes 0.25Y Government spending 400 Investment 1,000 Net income from abroad 0.1NX Net transfers from abroad 100 b. If there is an improvement in the government budget balance by 4% the country will witness a () and this increased current account balance would be
Which of the following statements is correct? (2)(1) When a British firm invests in a bicycle manufacturing facility in South Africa,the amount concerned is entered as an inflow on the current account of theSouth African balance of payments.(2) When someone purchases a second‐hand car, the transaction is included inthe calculation of GDP in the year the sale took place.(3) A deficit on the current account of the balance of payments indicates thatthe country exported more than it imported during the period in question.(4) In the base year, the value of nominal GDP is equal to the value of real GDP.
In the equation Y = C + I + G + Nx, sensitize the citizens aboutthe mechanism under which net exports come up.
Please solve and show steps. I do not understand how 10 Billiong, -12billion is the answer.
In an open economy, a permanent beneficial suply shock (s< 0)implie tha the domestic real exchange rate wil: Oappreciate as the est of the word buys the domestic curency Oremain unchanged because of fsetig movements n he domestic prie level Oremain unchanged because of ffseting movements in realinteret rates Odepreciate so as to crowd-in net exports
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