It is known that the Indonesian economy can be written into the following equations:Y = C +1+ G + NXY = 8000G - 2500T= 2000C- 500 + 2/3(Y – T)|= 900 – 50rNX - 1500 – 250 er-r- 5.a. Determine the value of private saving, government saving, national saving, investment,trade balance, and exchange rate balance.b. Now suppose the world interest rate r* drops from 5 to 3 percent. Calculate the valueof private saving, government saving, national saving, investment, trade balance, andexchange rate balance. Explain what you find from the change in world interest rates.Use curves to clarify your answer.

Y=8000 G=2500 T=2000 C=500+2/3(Y-T) I=900-50r NX=1500-250E r=r*=5

Answered: It is known that the Indonesian economy…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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