Current Account equilibrium is defined as NX = x₁YW + x2R=m₁Y + m₂R and Capital Account equilibrium as CP = x(i - iW) with Balance of Payments equilibrium being the sum of the two. How can we represent the three conditions of equilibrium (in interest rate and output space), and why are we justified in approximating.

Current Account equilibrium is defined as NX = x₁YW + x2R=m₁Y + m₂R and Capital Account equilibrium as CP = x(i - iW) with Balance of Payments equilibrium being the sum of the two. How can we represent the three conditions of equilibrium (in interest rate and output space), and why are we justified in approximating.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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