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Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue
Edition 18ISBN: 9780077354237Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue
Edition 18ISBN: 9780077354237 Exercise 4
The data in columns 1 and 2 of the table below are for a private closed economy.
a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy.
b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in columns 5 and 6 to determine the equilibrium GDP for the open economy. Explain why this equilibrium GDP differs from that of the closed economy.
c. Given the original $20 billion level of exports, what would be the equilibrium GDP if imports were $10 billion greater at each level of GDP
d. What is the multiplier in this example
a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy.
b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in columns 5 and 6 to determine the equilibrium GDP for the open economy. Explain why this equilibrium GDP differs from that of the closed economy.
c. Given the original $20 billion level of exports, what would be the equilibrium GDP if imports were $10 billion greater at each level of GDP
d. What is the multiplier in this example
Explanation
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A closed economy is the one that does no...
Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue
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