--%>
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 : Explain the basic goal of a business

    Normal 0 false false

    		•
  • Q : Explain the investment opportunity

    Explain the investment opportunity schedule (IOS)? How does it help financial managers take business decisions? The investment opportunity schedule illustrates graphically proposed capital budgeting projects depicting the IRR and dollar amount

    		•
  • Q : Bg explain factors that responsible for

    explain factors that responsible for the recent surge in international market

    		•
  • Q : Define Augmentation Augmentation : An

    Augmentation: An authorized raise to a formerly authorized appropriation or allotment. This augment can be authorized by the Budget Act provisional language, control sections, or other legislation. Generally a Budget Revision or an Ex

    		•
  • Q : Explain Merger Merger : A merger takes

    Merger: A merger takes place whenever two companies unite to form a single company. This is very alike to an acquisition or takeover, apart from that the existing stock-holders of both companies comprised retain a shared interest in the latest corpora

    		•
  • 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 : What is a fund Fund: A lawful budgeting

    Fund: A lawful budgeting and accounting entity which offers for the segregation of moneys or other resources in the State Treasury for obligations in accordance with particular restrictions or limitations. A separate set of accounts should be maintain

    		•
  • Q : Explain Overhead Overhead : Those

    Overhead: Those elements of cost essential in the production of an article or the performance of a service that are of such a nature which the amount applicable to the product or service can’t be determined directly. Generally they relate to tho

    		•
  • Q : Determine per unit cost of production

    Normal 0 false false

  • Q : Why banks make short-term or

    Banks desire to make short-term, self-liquidating loans to businesses. Why? Banks desire to be able to illustrate where the funds are likely to come from such that the borrower is capable to employ to make the req

    		•