The world consists of three countries, Alpha, Beta, and Gamma only. The following table provides some...

  

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The world consists of three countries, Alpha, Beta, and Gamma only. The following table provides some macroeconomic data for these three countries. Gross domestic product, GDP Consumption, C (Gross) Investment, I Beta: Government spending, G Taxes, T Exports of goods & services, EX Imports of goods & services, IM Private savings, S Public savings, S National saving. S Net unilateral transfer Current account, CA Sales of country's financial assets to foreign residents Purchases of foreign financial assets by domestic residents Official reserve transactions, ORT Financial account, KA Capital account Note: Empty cell only means the data is not given in the question. Country-specific information: Alpha: • Consumption, investment, and taxes represent 85%, 10% and 5% of the country's GDP respectively. • Alpha runs a trade surplus of 250 with Beta. . The flow of goods & services from Alpha to Gamma is equal to 2150. Alpha 10625 1250 . 0 2415 . 750 0 Beta Gamma 15000 18000 Other information: The sum of all countries' exports of goods and services is equal to 16700. . The central banks only make transactions with other countries' central banks. 4125 0 1875 Government spending on final products represents 22% of the country's GDP. . The country has a balanced (fiscal) budget and a balance of payment deficit of 350. • Beta's consumption of Alpha's products is equal to 2850. 3315 0 3900 900 0 3600 1150 Gamma: • Firms spend 12.5% of GDP on the acquisition of new (physical) capital. • Although the sales of Gamma's products to Beta are worth 2025, Gamma runs a trade deficit of 2125 with Beta. 0 a) Complete the table above, and you are not required to provide explanation in this part of the question; (15 points) Note: The table is reproduced on page 5 of this assignment. You MUST submit that page for grading: otherwise, you will be receiving a grade of zero for the whole question. b) Which country has twin deficits? Explain. (5 points) The world consists of three countries, Alpha, Beta, and Gamma only. The following table provides some macroeconomic data for these three countries. Gross domestic product, GDP Consumption, C (Gross) Investment, I Beta: Government spending, G Taxes, T Exports of goods & services, EX Imports of goods & services, IM Private savings, S Public savings, S National saving. S Net unilateral transfer Current account, CA Sales of country's financial assets to foreign residents Purchases of foreign financial assets by domestic residents Official reserve transactions, ORT Financial account, KA Capital account Note: Empty cell only means the data is not given in the question. Country-specific information: Alpha: • Consumption, investment, and taxes represent 85%, 10% and 5% of the country's GDP respectively. • Alpha runs a trade surplus of 250 with Beta. . The flow of goods & services from Alpha to Gamma is equal to 2150. Alpha 10625 1250 . 0 2415 . 750 0 Beta Gamma 15000 18000 Other information: The sum of all countries' exports of goods and services is equal to 16700. . The central banks only make transactions with other countries' central banks. 4125 0 1875 Government spending on final products represents 22% of the country's GDP. . The country has a balanced (fiscal) budget and a balance of payment deficit of 350. • Beta's consumption of Alpha's products is equal to 2850. 3315 0 3900 900 0 3600 1150 Gamma: • Firms spend 12.5% of GDP on the acquisition of new (physical) capital. • Although the sales of Gamma's products to Beta are worth 2025, Gamma runs a trade deficit of 2125 with Beta. 0 a) Complete the table above, and you are not required to provide explanation in this part of the question; (15 points) Note: The table is reproduced on page 5 of this assignment. You MUST submit that page for grading: otherwise, you will be receiving a grade of zero for the whole question. b) Which country has twin deficits? Explain. (5 points)

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a Complete the table Country Gross Domestic Product GDP Consumption C Investment I Government Spendi... View the full answer