1. Suppose that C = 40+0.9Yd; I = 50; G =10; X= 50; M= 10+0.1Y; T =10; R=0 and Yd= Y-T+R - National income - Compare the investment multipliers and tax multipliers of closed and open economy.

2. We have marginal propensities of import and marginal propensities of saving in Laos as 0.2 and 0.5 and in America as 0.3 and 0.2, respectively.

- Please calculate those two countries' open economic multipliers.
- There are three rounds of trade between Laos and the US. Calculate the national income of Laos and the US for each round. If Laos initially exports 35 million to the United States.

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To calculate the investment multipliers for a closed economy we need to find the change in national income Y for a given change in investment I We can ... View the full answer