Suppose that the following equations describe an open economy: C = 10 + (0.5) (Y-T), T...
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Suppose that the following equations describe an open economy: C = 10 + (0.5) (Y-T), T = 10, 1= 20, G = 10, X = 15, M = (0.05)Y + 10 E. and = 0.5, where & is the real exchange rate. (a) Find the multiplier and equilibrium GDP. (10 Points) (b) Find the equilibrium net export value. (5 Points) (c) What is the income level that balances trade? (5 Points) M Suppose that the following equations describe an open economy: C = 10 + (0.5) (Y-T), T = 10, 1= 20, G = 10, X = 15, M = (0.05)Y + 10 E. and = 0.5, where & is the real exchange rate. (a) Find the multiplier and equilibrium GDP. (10 Points) (b) Find the equilibrium net export value. (5 Points) (c) What is the income level that balances trade? (5 Points) M
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Answer rating: 100% (QA)
a To find the multiplier and equilibrium GDP we first need to derive the equation for aggregate dema... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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