Sunshine is a small open economy described by the following long run classical equation where Y is the economic real GPD,T-taxes,G-government spending,NX-net exports,I- investment, C-consumption r-domestic interest rates, r*world interest rates. Y=8000 G=2500 T=200 C=500+2/3(Y-T) I=900-50r NX=1500-250£ r=r*=8 a) find the trade balance, investment, national savings and the equilibrium exchange rate. b) the government of sunshine cut its spending to 2000.compute the investment,trade balance, national savings and the equilibrium exchange rate. C) now suppose the world interest rates falls from 8-3 per cent (G is again 2000 ).compute private savings public savings, national savings,investmentents,trade balance and the equilibrium exchange rate..
Sunshine is a small open economy described by the following long run classical equation where Y is the economic real GPD,T-taxes,G-government spending,NX-net exports,I- investment, C-consumption r-domestic interest rates, r*world interest rates.
Y=8000
G=2500
T=200
C=500+2/3(Y-T)
I=900-50r
NX=1500-250£
r=r*=8
a) find the trade balance, investment, national savings and the equilibrium exchange rate.
b) the government of sunshine cut its spending to 2000.compute the investment,trade balance, national savings and the equilibrium exchange rate.
C) now suppose the world interest rates falls from 8-3 per cent (G is again 2000 ).compute private
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