Consider the following data for MILESTONES, a hypothetical economy and nation-state. GDP = 8500 billion Government Purchases 500 billion Government Tax Revenue = 1000 billion Welfare Payments = 200 billion Social Security Payments = 400 billion Medicare Payments = 300 billion Interest Payments = 200 billion Consumption = 7200 billion Gross Investment 800 billion Net Foreign Factor Income = -500 billion PART A 1. What is the level of national saving(NS) in MILESTONES 2. What is the current account (CA) balance in MILESTONES? 3. Describe the current relationship between saving (NS) and gross investment (GI)?

Q: A country finds itself in the following situation: a government budget surplus of $630; total…

A: Answer: Given, Budget surplus (or government saving) = $630 Domestic saving = $990 Investment = $900…

Q: People sometimes worry that American trade with other countries will lead to large U.S. trade…

A: The answer is - a) have both current account and financial account deficits at the same time.

Q: Capital account surplus indicates that the country is net creditor in the world. True or False?…

A: Balance of payment records all the transaction between domestic country and the rest of the world.…

Q: Given the following information: Millions $ Import of goods and services 298.00 Gross Investment…

A: i) NNP at fc=GDP at mp-Indirect taxes+NFIA-Capital consumption allowance+SubsidiesNNP at…

Q: What is meant by current account deficit and current account surplus? State their significance

A: A balance of payment account is a record of international transactions of an economy over a…

Q: In an open economy, national saving equalsdomestic investmenta. plus the government’s budget…

A: An open economy represents that economy that establishes contact with the rest of the world in terms…

Q: 3. You are given the data below for 2008 for the imaginary country of Amagre, whose currency is the…

A: Net foreign investment = Earning on foreign investment - foreign earnings on amagre investment

Q: Net exports and net capital outflow: 1. Which of the following statements about a country with a…

A: Trade deficit is a situation where the total exports of the economy will be lower than the imports…

Q: You have the following annual data for the New Zealand economy ($bn): GDP (Y)…

A: ECONOMIC DATA OF NEW ZEALAND: AMOUNT ($bn): GDP (Y) 190 Gross National Disposable Income (Yd)…

Q: Suppose that US citizens start saving more. What does this imply about the supply of loanable funds…

A: The impact of saving on real rate of interest is illustrated below:

Q: Assume prices are flexible, factors of production are fully employed in both countries and there is…

A: In small open economy,due to increase in investment demand,aggregate demand would increase but to a…

Q: In the Model of Open Economy (Figure 1 below), use Saving (S), Investment (1). Net Export (NX), Net…

A: Here, some of the economic activities are mentioned as demand and supply of loanable funds, and…

Q: Suppose that global investors fear a less friendly environment in Argentina in the face of elevated…

A: The economic outlook of the country is one of the determinant factors attracting global investors to…

Q: Effect of Foreign Interest Rates - Peter Thiel. If foreign interest rates rise, this will cause the…

A: If foreign interest rates rise, this will cause the net capital outflow to increase. Because,…

Q: Why could a current account deficit stimulate an economy? List at least two reasons and explain with…

A: Current account deficit The current account deficit is a situation in the economy of a country…

Q: Suppose there are massive open economies and suppose that these are the only two economies in the…

A: This is the open economy, where trade takes place with the assumption that there is only two…

Q: In a large open economy, if households’ current income increases, then the real interest rate…

A: The current account is the sum of net exports, net income payments, and net transfer payments.

Q: 6. Suppose Zambia is an open economy in the long run described by the following equations:…

A: Equilibrium in the market occurs where output equals aggregate expenditure

Q: Let K denote the quantity of capital a country has at the beginning of period t. Also, suppose that…

A: Capital refers to anything that provides value or advantage to its owner, such as a factory and its…

Q: The U.S. trade deficits of the 1980s and 1990s may represent a problem because they will require…

A: Trade Deficit: The term trade deficit refers to the situation where the country's import is more…

Q: Canada is an open economy that interacts with the rest of the world through its involvement in world…

A: Answer: Given that:   Suppose you are the purchasing manager for a large chain of restaurants in…

Q: Capital account surplus indicates that the country is net creditor in the world.True or False?…

A: A capital account surplus indicates that the money is flowing into the country.

Q: In 2019 Country A had a current account deficit of $1.2 billion. CountryA's capital account was in a…

A: Current Account is the account which show the value of export and imports done by country in a…

Q: Discuss the implications of a persistent current account deficit for an open economy like Pakistan…

A: A current account deficit is a trade indicator that indicates a country's imports of goods,…

Q: The following table contains hypothetical data for Canada's balance of payments in a particular…

A: Capital account of a country includes foreign investments and loans. It also includes monetary…

Q: A country finds itself in the following situation: a government budget surplus of $800; total…

A: "Government;s budget surplus occurs when government savings are more than the government…

Q: Which of the following is included in a nation's current account? a) Purchases of foreign assets b)…

A: Bop , which stands for balance of payments, is the way a country makes record of its economic…

Q: In a small open economy, output (gross domestic product) is $30 billion, government purchases are $6…

A: Here, it is given that the economic output is $30 billion with government purchases is $6 billion…

Q: In a small open economy, if domestic investment equals $70 billion, domestic private saving equals…

A: Domestic saving in a country is the sum total of the private and government savings. Here, domestic…

Q: You have the following annual figures for the New Zealand economy. Investment…

A: The Saving  = Private Saving +Public Saving. The current accounts of BOP includes the net export,…

Q: If the balance on the current account is $8.42 billion and the balance on the financial account is…

A: Given; Balance of current account= $8.42 billion Balance of financial account= $7.43 To find:-…

Q: Imagine that the U.S. economy finds itself in the following situation: a government budget deficit…

A: Given information:

Q: Suppose that during 2004, country A had exports of goods of $50, imports of goods of $60, exports of…

A: Current account records all the economic transactions between residents of one country and rest of…

Q: A country finds itself in the following situation: a government budget deficit of $700; total…

A: ANSWERThere are two main sources for the supply of financial capital in the U.S. economy: saving by…

Q: Suppose a country exports $60 million worth of goods and services, while it imports $50 million…

A: The term GDP means the aggregate total output produced by a country in the current year. This…

Q: 1. Other things equal, what is the likely impact of a U.S. trade deficit on 1. the current account?…

A: An import/export deficit is a sum by which the expense of a nation's imports surpasses its…

Q: 5   List the types of policies that can lead to a current account deficit

A: Answer to the question is as follows:

Q: Imagine that the economy of Germany finds itself in the following situation: the government budget…

A: The national investment and national saving identity explains the relationship between the total…

Q: Describe three means by which a current account deficit in a developing country is financed. (By…

A: Concept Current account deficit is measuring a country's commerce in which Its imports outnumber its…