Consider an economy with the given equations. Y = C + I + G + NX Y=$6000 G=$1050 T=$1100 C=$250+0.65(Y−T) I=1000−45r NX=1285−1285? r=r*=6 b. Suppose now that G rises to $1350. Solve for private saving, public
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Consider an economy with the given equations.
Y = C + I + G + NX
Y=$6000
G=$1050
T=$1100
C=$250+0.65(Y−T)
I=1000−45r
NX=1285−1285?
r=r*=6
b. Suppose now that G rises to $1350. Solve for private saving,
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- Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 60 25 -10 6 55 30 -5 5 50 35 0 4 45 40 5 3 40 45 10 2 35 50 15 Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. On the following graph, plot the relationship between the real…Not hand written solutions pleaseConsider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 50 20 -10 6 45 30 -5 5 40 40 4 35 50 30 60 10 2 25 70 15 Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market. Market for Loanable Funds 10 Demand 8 Supply Equilibrium 2 20 40 60 80 100 QUANTITY OF LOANABLE FUNDS REAL INTEREST RATE
- Answer These Three Sub Parts i) In an open economy, Y = C + I + G + NX. Using symbols from this identity, write anexpression that defines national saving, S, in an open economy.S = _________________________ . ii) True or False? In an open economy, the following is always true: S = I + NCO, where I isinvestment spending and NCO is net capital outflow. iii) In an open economy, a country’s net capital outflow is:a.) the value of domestic assets purchased by foreigners minus the value of foreign assetspurchased by domestic residentsb.) the value of foreign assets purchased by domestic residents minus the value of domesticassets purchased by foreigners.Suppose that you are given the following model for the goods market: C=100 +0.4(Y-T), I=20+.1 Y-200r, G=400, X=200 +0.2Y*-10e, IM=300 +0.3Y+10e and you know that r = 2%, Y*=1,500, e=1 and T =50. Note: e= real exchange rate. The equation for the demand for domestic goods (Z) is and the multiplier for this economy is If the economy were closed, the equation for the demand for domestic goods (Z') would be and the multiplier for the closed economy would be Z = 576 + 0.2Y; multiplier open eco is 2; Z' = 526 + 0.5Y ; multiplier closed eco is 4 O Z = 1000+ 0.4Y; multiplier open eco is 1.67; Z' = 500+ 0.5Y ; multiplier closed eco is 5 Z = 676 + 0.2Y; multiplier open eco is 5; Z' = 496 + 0.5Y; multiplier closed eco is 2 OZ = 576 +0.2Y; multiplier open eco is 5 ; Z' = 500+ 0.4Y; multiplier closed eco is 1.67Economics Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget. Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 60 30 -10 6 55 40 -5 5 50 50 0 4 45 60 5 3 40 70 10 2 35 80 15 Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market.
- QUESTION 6 Imagine that Neverland decided to re-establish links to the rest of the world and is now a small open economy. Its economy can be described by the following consumption and investment curves: cd()= 5000 – 1000r+0 25Y and jd(r) = 500 – 1800r + 0 2Y: Its output is y = 13000 and government spending is G= 1800: The world interest rate is 5%. Which of the following statements are true? O a. Neverland runs a current account deficit O b. Neverland runs a current account surplus O c. There is insufficient information to answer this questioni need the answer quicklyConsider a large one economy where: Cd= 1+.9(Y-T)-150r Id=80-200r y=250 T=40 G=50 NFP=0 If the saving schedule for the rest of the world is Sd=15+516.6r and its investment schedule is Id=120-300r, then: a) What is the equilibrium world interest rate? b) What is the current account for the large open economy? c) What is the financial account for the large open economy?