please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly Consider an open economy, where the goods market is in equilibrium when the domestic output equals the domestic and foreign demand for domestic goods.VariableConsumptionInvestmentGovernment spendingBehavioral equations ($)0.65Y+4500.4Y-850r+6004,000Imports0.2Y+ 300Exports0.5Y -725€Taxes0.35YReal exchange rate0.7Foreign output0.45YReal interest rate4%Suppose the real exchange rate increases to 0.75.The new value of net exports is $-72.48. (Round your answer to two decimal places.)

Equilibrium in an Open EconomyIn an open economy, equilibrium is achieved when the domestic output…

Answered: Consider an open economy, where the…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Open-Economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 3QCMC

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Consider the following open economy SImodel set upY = 18000C = 300 + 0.8(Y − 2500)I = 3500 − 400(r)r = r∗ = 5G = 3000T = 2500NX = 5000 − 30(e)(a) Compute National Savings.(b) Compute Net Exports, NX and exchangerate, e.(d) Compute the impact on e, if both Gincrease by 500.
ProblemYou are given the following information about an open economyGross private domestic investment:40Government purchases of goods and services:30Gross national product(GNP):200Current account balance:-20Taxes:60Government transfer payment to the domestic private sector:25Interest payments from the government to the domestic privatesector:15Factor in come received from the rest of the world:7Factor payments made to the rest of the world:9Calculate the following:a)Consumptionb)NetExportsc)GDPd)Net factor payments from abroade)Private savings (f) Government savings (g) National savings
Q3-14 If a country's currency's external value is tied or pegged to the currency values of the country's leading trading partners, this arrangement is known as a Select one: a. peg against the SDR. b. managed float. c. peg against a "basket" of currencies or a "composite." d. currency board.
3. How reasonable is it for every country to follow policies aimed at increasing net exports?
If domestic Investment increases, and there is no change in the amount of private and public saving, what must happen to the size of the trade deficit?
Imagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?
REAL INTEREST RATE The following graph shows the market for loanable funds in Ouvert, a large open economy. The government of Ouvert has just instituted a tax cut, increasing the deficit. tudy Tools On the graph, shift either the demand curve or the supply curve to illustrate the change in fiscal policy. ns ress Tips cess Tips FOR YOU Domestic Saving StudyHu y Tools Supply Demand for Principles of Supply ··. e Feedback Demand O Type here to search 341 PM 89 F AQI 107 7/25/2021
In an open economy, a permanent beneficial suply shock (s< 0)implie tha the domestic real exchange rate wil: Oappreciate as the est of the word buys the domestic curency Oremain unchanged because of fsetig movements n he domestic prie level Oremain unchanged because of ffseting movements in realinteret rates Odepreciate so as to crowd-in net exports
1. When calculating gross national disposable income in an open economy, we adjust gross nationalexpenditure by:a. subtracting exports and adding back imports.b. adding in net income earned from foreign sources, plus the trade balance, plus net unilateraltransfers from abroad.c. subtracting depreciation, payroll taxes, and indirect business taxes, while adding in subsidies.d. taking out net factor income from abroad and subtracting net unilateral transfers.
How would the following transactions affectU.S. exports, imports, and net exports?a. An American art professor spends the summertouring museums in Europe.b. Students in Paris flock to see the latest movie fromHollywood.c. Your uncle buys a new Volvo.d. The student bookstore at Oxford University inEngland sells a copy of this textbook.e. A Canadian citizen shops at a store in northernVermont to avoid Canadian sales taxes
) Consider the following open economy SImodel set upY = 18000C = 300 + 0.8(Y − 2500)I = 3500 − 400(r)r = r* = 5G = 3000T = 2500(a) Compute public savings. How much isnational savings, S?(b) Compute Net Exports.
The economy of Switzerland is measured in million dollars and is described by the following equations (Questions 28 to 32). C = 160 + 0.5 (Y - T) T- 120 1- 70 G-150 NX - 5 Y 625 Find the output gap. 25 -15 30 15 The economy of Switzerland is measured in million dollars and is described by the following equations (Questions 28 to 32). C- 160 + 0.5 (Y - T) T- 120 1- 70 G- 150 S-XN Y- 625 Find the output gap as a percentage. -4% -5.2% 4% O 5.2%

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