ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
In an open economy, if the level of net exports rises, it must be the case that
a) there is an increase in saving.
b) there is an increase in investment.
c) the value of saving less investment must fall.
d) none of the above.
Why the correct answer is D?
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- In an open economy,a change in domestic net foreign asset depends on how much is saved, and on investment,which reduces the domestic net foreign asset. True or False.arrow_forwardWhich of the following is TRUE of an open economy? GDP = C+I+G+X- IM O GDP = C+ I+G GDP = T- TR -G GDP = SPrivate + SGovernment %3Darrow_forwardQ3-14 If a country's currency's external value is tied or pegged to the currency values of the country's leading trading partners, this arrangement is known as a Select one: a. peg against the SDR. b. managed float. c. peg against a "basket" of currencies or a "composite." d. currency board.arrow_forward
- For an open economy, which of the following expressions represents private saving (S)? Group of answer choices investment plus tax revenues less government expenditure plus net exports, I + TG + NX I+T G NX I + G + NX GT+NXI none of the abovearrow_forwardGive correct answer with short explanationarrow_forwardWhich of the following statements is true? A)The open-economy IS curve is derived in the same way that the closed-economy IS curve is derived. B)The closed-economy IS curve is downward sloping, but the open-economy IS curve is upward sloping. C)Some factors that shift the IS curve in the closed economy in one direction will shift the IS curve in the open economy in the opposite direction. D)Factors that raise a country's current net exports, given domestic output and the domestic real interest rate, shift the open-economy IS curve up.arrow_forward
- QUESTION 48 The equilibrium level of income in an open economy is where: B. Consumption + Savings = Imports + Exports. C. Savings + Exports = Investment + Exports. D. Savings + Imports = Investment + Exports.arrow_forwardSaving-Investment Diagram Real Interest Rate, r(percent Saving Curve Investment Curve DE F GH Desired Saving and Investment (in billions of dollars) Based on the Saving-Investment Diagram, if the world real interest rate is indicated by C, then the difference between values H and D measures the net capital outflow the difference between values H and F measures the trade deficit the difference between values H and D measures the trade deficit the domestic real interest rate is indicated by B none of the abovearrow_forwardAggregate expenditure in an open economy equals a) C + I + G + S - M b) C + I + G + T - M c) C + I + G + (X - M) d) C + I + G + (M - X)arrow_forward
- If Sprvt (private sector savings) and the CA (current account) are the only SOURCES of savings in the economy, Question 41 options: net Exports (NX) must be zero or positive the Current Account must be zero or positive the government budget is either balanced or in deficit investment must be zeroarrow_forwardAnswer 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.arrow_forwardIf there is no trade deficit, budget deficit =$500, what is the difference between savings and planned investment in equilibrium?arrow_forward
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