Figure 32-4 Refer to the following diagram of the open- economy macroeconomic model to answer the questions that follow. REAL INTEREST RATE a to b. b to a. a to c. Graph (a) Od to a. с A b Refer to Figure 32-4. The initial effect of an increase in the budget deficit in the loanable funds market shown in graph (a) can be illustrated as a move from S₁ S₂ QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE REAL INTEREST RATE 1.50 1.25 1.00 0.75 0.50 Graph (b) NCO NET CAPITAL OUTFLOW Graph (c) D₁ D₂ S₁ S₂ S₂ QUANTITY OF DOLLARS

Figure 32-4 Refer to the following diagram of the open- economy macroeconomic model to answer the questions that follow. REAL INTEREST RATE a to b. b to a. a to c. Graph (a) Od to a. с A b Refer to Figure 32-4. The initial effect of an increase in the budget deficit in the loanable funds market shown in graph (a) can be illustrated as a move from S₁ S₂ QUANTITY OF LOANABLE FUNDS REAL EXCHANGE RATE REAL INTEREST RATE 1.50 1.25 1.00 0.75 0.50 Graph (b) NCO NET CAPITAL OUTFLOW Graph (c) D₁ D₂ S₁ S₂ S₂ QUANTITY OF DOLLARS

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Explain the aggregate demand curve. If we consider CPEC as an autonomous investment, use the aggregate demand curve to explain why CPEC is crucial for economic growth in Pakistan. 2. Explain aggregate supply curve. Use the aggregate supply curve to explain the policies which government of Pakistan should adopt to increase Real GDP. 3. According to IS-LM framework what policy should be adopted by State Bank of Pakistan to increase level of GDP/output. Give detailed explanation of your answer.
Create a graph using the loanable funds model illustrating the below explanation. An increased budget deficit triggers higher government borrowing, leading to heightened competition for available funds in financial markets and subsequently higher interest rates. These elevated interest rates discourage private investment and borrowing by businesses and individuals, a phenomenon known as "crowding out." Simultaneously, the higher interest rates can result in a stronger domestic currency, making exports relatively more expensive and imports cheaper. This dual impact worsens the trade deficit by reducing export competitiveness and increasing the attractiveness of imported goods, contributing to a broader economic imbalance.
please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly
PLEASE ANSWER ALL QUESTIONS NOT JUST SOME PLEASE WRITE THE EXACT NUMBERS FOR THE GRAPH. PLEASE READ CAREFULLY, THIS MAY BE A SIMILAR QUESTION, BUT ALL QUESTIONS ARE DIFFERENT
With the following excerpts, explain the extent to which the extract supports the view that the BRICS have a similar macroeconomic performance.
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A small open economy is described by the following equations: C = 300 + 0.8(Y - T) | = 220 - 40r NX = 300 - 60 e G = 200 T = 150 M = 1500 P = 3 r* = 5 L= Y - 60r If G increases by 30 to 230 What is the government budget deficit?
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In a closed economy, savings and investments are interacted/coordinated. Who are savers and investors in this closed economy? How does financial (capital and money) market work? How does crowding out happen? Briefly discuss, by using I, S, G, T, X, M, how the scenario change when the economy is OPEN.