(3.3) Goods market in an open economy Consider an open economy characterized by the following equations:...
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(3.3) Goods market in an open economy Consider an open economy characterized by the following equations: C=100+0.6(Y-T) I=200+ 0.2Y IM 0.3Y+200€ X=0.4Y 600 + 400 I moreover, G= 200, T-200, = 1, Y = 2000. (a) Calculate the government spending multiplier m, ie. in equilibrium it should hold AY MAG. Calculate the equilibrium values of Y,C, I, IM/E,X, NX. (b) What is the impact of increasing government spending to G= 220 in terms of the new equilibrium values Y', IM'/e, X', NX"? (e) What is the impact of an increased foreign income Y2200 (G200) in terms of the new equilibrium values Y', IM'/e, X', NX"? (d) What is the impact of a real depreciation e' 0.9 (G200, Y2000) in terms of the new equilibrium values Y', IM'Je, X', NX" (3.3) Goods market in an open economy Consider an open economy characterized by the following equations: C=100+0.6(Y-T) I=200+ 0.2Y IM 0.3Y+200€ X=0.4Y 600 + 400 I moreover, G= 200, T-200, = 1, Y = 2000. (a) Calculate the government spending multiplier m, ie. in equilibrium it should hold AY MAG. Calculate the equilibrium values of Y,C, I, IM/E,X, NX. (b) What is the impact of increasing government spending to G= 220 in terms of the new equilibrium values Y', IM'/e, X', NX"? (e) What is the impact of an increased foreign income Y2200 (G200) in terms of the new equilibrium values Y', IM'/e, X', NX"? (d) What is the impact of a real depreciation e' 0.9 (G200, Y2000) in terms of the new equilibrium values Y', IM'Je, X', NX"
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Related Book For
Process Dynamics and Control
ISBN: 978-1119385561
4th edition
Authors: Dale E. Seborg, Thomas F. Edgar, Duncan A. Mellichamp, Francis J. Doyle
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