You are given the simple open economic model: C + I + G + (X-M) = GDP
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Question:
You are given the simple open economic model:
C + I + G + (X-M) = GDP = AI = C + S + (T- R).
Please derive the relationships that this model implies for the Government Budget, International Trade Balance (X-M) and Market for Non Current Consumption (I-S).
What happens to the model if we impose a Mandatory Government Balanced Budget?
What would an International Trade Surplus imply for the Government Budget if our Non-Current Consumption Market is in Balance? Show analysis and calculations.
Related Book For
Principles of Macroeconomics
ISBN: 978-0134078809
12th edition
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster
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