In a small open economy, output (gross domestic product) is $25 billion, government purchases are $6 billion,
Question:
For each value of the world real interest rate, find national saving, foreign lending, and absorption. Calculate net exports as the difference between output and absorption. What is the relationship between net exports and foreign lending?
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World Real Interest Rate 5% 496 3% 2% Desired Consumption $12 billion $13 billion $14 billion $15 billion Desired Investment $3 billion $4 billion $5 billion $6 billion
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Related Book For
Macroeconomics
ISBN: 978-0321675606
6th Canadian Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
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