--%>
Assignment Help - homework help

Equilibrium GDP for the open economy

The data of columns 1 and 2 of the given table are for private closed economy. Open up this economy to international trade through including the export & import figures of columns 3 and 4.  Fill  up in columns 5 and 6 to find out the equilibrium GDP for the open economy. Describe why this equilibrium GDP varies from that of the closed economy.

365_Private closed economy.png

E

Expert

Verified

Net export data for column 5 (top to bottom); $-10 billion in every space. Aggregate expenditure data for column 6 (top to bottom): $230; $270; $310; $350; $390; $430; $470; $510. For the open economy equilibrium GDP is $350 billion, $50 billion below the $400 billion equilibrium GDP for the closed economy. The $-10 billion of overall exports is a leakage which reduces equilibrium GDP by $50 billion. 

   Related Questions in Finance Basics

  • Q : International Business and Finance

    Alpha and Beta Companies can borrow at the described rates. Alpha Beta Moody's credit rating Aa Baa Fixed-rate borrowing cost 10.5% 12.0% Floating-rate borrow

    		•
  • Q : Why riskiness of portfolios is

    Normal 0 false false

  • Q : Shapes of marginal-cost and the

    Normal 0 false false

    		•
  • Q : Why warrants are hardly exercised

    Describe why warrants are hardly ever exercised unless the time to maturity is small? Warrants are hardly ever exercised until the time to expiration is small since the market price of the warrant is higher than the exercise value. The holder o

    		•
  • Q : Three examples of mutually exclusive

    Provide three examples of mutually exclusive projects. Mutually exclusive projects are projects which compete against each other for our selection. If firm were considering the purchase of new computer, requiring only one computer, then the pro

    		•
  • Q : What are Salaries and Wages Supplement

    Salaries and Wages Supplement: The annual publication issued in a while after the Governor's Budget, including a summary of all positions by department, unit, and categorization for the past, present, and budget years, as of July 1 of the present year

    		•
  • Q : Retiring an internally held debt and

    Normal 0 false false

  • Q : Define May Revision May Revision : The

    May Revision: The annual update to the Governor’s Budget having a revised estimate of General Fund revenues for the present and ensuing fiscal years, any proposals to adjust expenditures to reflect the updated revenue estimates,

    		•
  • Q : Describe Reappropriation

    Reappropriation: The expansion of an appropriation’s accessibility for encumbrance and/or expenses beyond its set annihilation date and/or for a new point. Re-appropriations are usually authorized by statute for 1-year at a time however might be

    		•
  • Q : Equilibrium price level and level of

    Normal 0 false false