Question: I need help on this two separate macroeconomic questions Consider an economy described by the following equations: Y = C + I + G +

I need help on this two separate macroeconomic questions

I need help on this two separate macroeconomic questions Consider an economydescribed by the following equations: Y = C + I + G

Consider an economy described by the following equations: Y = C + I + G + NX Y = 8,000 G = 2,500 T = 2,000 c = 500 +2/3(Y T) I = 900 - 50r NX = 1,500 - 2506 r = r* = 8 a. In this economy, solve for private saving, public saving, national saving, investment, the trade balance, and the equilibrium exchange rate b. Suppose G is reduced to 2,000. Solve for private saving, public saving, national saving, investment, the trade balance, and the equilibrium exchange rate. Explain what you find. c. Now suppose the world interest rate falls to 3%, and G is again at 2,500. Solve for private saving, public saving, national saving, investment, the trade balance, and the equilibrium exchange rate. Explain what you find. g'aveling in Mexico is much cheaper now than it was ten years ago,\" says a friend. \"Ten years ago, a dollar bought 10 pesos; now a dollar buys 15 pesos.\" Is your friend right or wrong? Inflation over the ten year period was 25% in the US and 100% in Mexico, has it become more or less expensive to travel in Mexico? Use a concrete example, such as an American hot dog versus a Mexican taco to convince your friend

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!