2.The data in columns 1 and 2 of the table below (in billions) are for a private closed economy.

(1)

Real

GDP=DI

(2)

Closed

Economy AE

(3)

Export

(4)

Import

(5)

Net

exports

(6)

AE open

economy

$430

$450

$470

$490

$510

$440

$455

$470

$485

$500

$10

$10

$10

$10

$10

$15

$15

$15

$15

$15

$_____

$_____

$_____

$_____

$_____

$ _____

$ _____

$ _____

$ _____

$ _____

a.Use columns 1 and 2 to determine the equilibrium real GDP for this hypothetical private closed economy.

b.Now, open this economy to international trade by including the export and import figures of columns 3 and 4.Fill in columns 5 and 6 and determine the equilibrium GDP for the open economy.

c.Make a new column 7.At each level of real GDP, add government purchases of $10b. to open economy AE and enter the new AE in column 7.What would the new equilibrium real GDP be?