Suppose you have the following information - two large open economies questionUSA Initial ConditionsS = 65 + 300 rw| = 120 - 300 pChina Initial ConditionsS = 240 + 200 r"| = 235 - 200 p"For all answers, just type in the number - no commas, no decimal points, $ signs, etc.The Trade deficit for the USA, initially, isNow China experiences some economic growth so that China's savings function is now:S = 260 + 200 rwGiven the shock to China's savings function, Investment in the US rises byGiven the shock to China's savings function, Consumption in the US rises by(note, you can answer this even though you don't have a consumptionfunction)Given the shock to China's savings function, Consumption in China increases more than it does in the US. Answer T for true and F for false.The trade deficit after the shock for the US isThese results are consistent with the following excerpt from Ben Bernanke; "a global saving glut--which helps to explain both the increase in the U.S. current accountdeficit and the relatively low level of long-term real interest rates in the world today." Answer T for true and F for false.

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Suppose you have the following information - two large open economies question

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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