Exercise 2 Using the Key Account Identity and assume the numbers you select has been representative for many years: a) How can you tell whether a country is a net lender or a net borrower? b) If public sector is a net borrower. Explain by using your own numbers (% of GDP) the different between whether the debt is internal or external. c) Present an example using your own numbers (% of GDP) a situation where private sector is a net lender while public sector is a net borrower. Explain what each number tell us about the players in each sector. d) Assume the numbers your chose in part c) is representative for many years. What can you tell about the situation in the country as a hole? Using the real exchange rate: e) The competitiveness of the manufacturing industry can be measured by using the real exchange rate. Present an example using words and your own numbers where the competitiveness increase. f) Use numbers from part e) in the purchasing power parity (PPP) and explain the conclusion you get from the theory.

Exercise 2 Using the Key Account Identity and assume the numbers you select has been representative for many years: a) How can you tell whether a country is a net lender or a net borrower? b) If public sector is a net borrower. Explain by using your own numbers (% of GDP) the different between whether the debt is internal or external. c) Present an example using your own numbers (% of GDP) a situation where private sector is a net lender while public sector is a net borrower. Explain what each number tell us about the players in each sector. d) Assume the numbers your chose in part c) is representative for many years. What can you tell about the situation in the country as a hole? Using the real exchange rate: e) The competitiveness of the manufacturing industry can be measured by using the real exchange rate. Present an example using words and your own numbers where the competitiveness increase. f) Use numbers from part e) in the purchasing power parity (PPP) and explain the conclusion you get from the theory.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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