a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. billion

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Chapter1: Making Economics Decisions
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The data in columns 1 and 2 in the table below are for a private closed economy.
(1) Real Domestic
Output (GDP - DI),
Billions
(2) Aggregate
Expenditures,
Private Closed
Economy,
Billions
(5) Net
Exports,
Billions
(6) Aggregate
Expenditures,
Private Open
Economy, Billions
(3) Exports,
Billions
(4) Imports,
Billions
$300
$340
$30
$20
350
380
30
20
400
420
30
20
450
460
30
20
500
500
30
20
550
540
30
20
600
580
30
20
650
620
30
20
a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy.
billion
b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in
the gray-shaded cells in columns 5 and 6.
Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a
negative sign (-) in front of those numbers.
What is the equilibrium GDP for the open economy?
billion
What is the change in equilibrium GDP caused by the addition of net exports?
billion
c. Given the original $30 billion level of exports, what would be net exports and the equilibrium GDP if imports were $10
billion less at each level of GDP? Fill in the gray-shaded cells.
Transcribed Image Text:The data in columns 1 and 2 in the table below are for a private closed economy. (1) Real Domestic Output (GDP - DI), Billions (2) Aggregate Expenditures, Private Closed Economy, Billions (5) Net Exports, Billions (6) Aggregate Expenditures, Private Open Economy, Billions (3) Exports, Billions (4) Imports, Billions $300 $340 $30 $20 350 380 30 20 400 420 30 20 450 460 30 20 500 500 30 20 550 540 30 20 600 580 30 20 650 620 30 20 a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. billion b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in the gray-shaded cells in columns 5 and 6. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. What is the equilibrium GDP for the open economy? billion What is the change in equilibrium GDP caused by the addition of net exports? billion c. Given the original $30 billion level of exports, what would be net exports and the equilibrium GDP if imports were $10 billion less at each level of GDP? Fill in the gray-shaded cells.
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