Consider an open economy, where the goods market is in equilibrium when the domestic output equals thedomestic and foreign demand for domestic goods.VariableBehavioral equations ($)0.65Yd +450ConsumptionInvestmentGovernment spendingImports0.4Y-850r+ 6004,0000.2Y+ 300ɛExportsТаxesReal exchange rateForeign outputReal interest rate0.5Y -725€0.35Y0.70.45Y4%Suppose the real exchange rate increases to 0.75.The new value of net exports is $(Round your answer to two decimal places.)

The open-economy goods market equilibrium refers to the point where the quantity of domestic goods…

Consider an open economy, where the goods market is in equilibrium when the domestic output equals the domestic and foreign demand for domestic goods. Variable Consumption Investment Government spending Imports Exports Taxes Behavioral equations ($) 0.65Y+450 0.4Y-850r+600 4,000 0.2Y+ 300€ * 0.5Y -7258 0.35Y 0.7 0.45Y 4% Real exchange rate Foreign output Real interest rate Suppose the real exchange rate increases to 0.75. The new value of net exports is $. (Round your answer to two decimal places.)

Consider an open economy, where the goods market is in equilibrium when the domestic output equals the domestic and foreign demand for domestic goods. Variable Consumption Investment Government spending Imports Exports Taxes Behavioral equations ($) 0.65Y+450 0.4Y-850r+600 4,000 0.2Y+ 300€ * 0.5Y -7258 0.35Y 0.7 0.45Y 4% Real exchange rate Foreign output Real interest rate Suppose the real exchange rate increases to 0.75. The new value of net exports is $. (Round your answer to two decimal places.)

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 1CQQ

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