Consider the following economy:-  Mariginal propensity to save = 0.2  Mariginal propensity to import = 0.2  Investment = $500  Governement spending = $300  Taxes = $ 200  Exports = $400  Autonomous import spending = $100    Given this information, beginning at the intial equilibirum output, suppose instead that exports rise by 50. What is the change in current account balance? A: -$25 B: $45 C: -$75 D: $35 E - None of the above

Principles of Economics (MindTap Course List)
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Author:N. Gregory Mankiw
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Chapter31: Open-Economy Macroeconomics: Basic Concepts
Section31.2: The Price For International transaction: Real And Nominal Exchange Rate
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Consider the following economy:- 

Mariginal propensity to save = 0.2

 Mariginal propensity to import = 0.2 

Investment = $500 

Governement spending = $300 

Taxes = $ 200 

Exports = $400 

Autonomous import spending = $100 

 

Given this information, beginning at the intial equilibirum output, suppose instead that exports rise by 50. What is the change in current account balance?

A: -$25

B: $45

C: -$75

D: $35

E - None of the above

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