Question: I got help for this question before from Chegg but It was totally wrong compare with the result from my professor. Now I got answer

I got help for this question before from Chegg but It was totally wrong compare with the result from my professor. Now I got answer from my teacher, but I need help for explanation and In case if it is close economy instead, which factors will change? I knew that there is no NX in close economy so it will be unchanged.

Use the long run model for a small open economy to determine the expected effect on the equilibrium from an increase in taxes (T). For each of the following variables, state whether it is expected to increase (+), decrease (), remain unchanged (0), or whether the effect is indeterminate (?). All variables are in real terms. (a) production (Y) (b) investments (I) (c) national savings (S) (d) net exports (NX) (e) the real exchange rate () \begin{tabular}{l|l|l} (a) & change in Y(+,,0, or ?): & 0 \\ \hline (b) & change in I(+,,0, or ?): & 0 \\ \hline (c) & change in S(+,,0, or ?): & + \\ \hline (d) & change in NX(+,,0, or ?): & + \\ \hline (e) & change in (+,,0, or ?): & - \\ \hline \end{tabular}
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
