in this economy, private saving= ate public saving investment the trade balance and the equilibrium exchang (please enter your answers in numerical value without any dollar sign, comma, or a decimal place.)
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- . The government has proposed Rs1,289 billion for the defence budget for the year 2020-21, 5.1% more compared to last year’s revised defence estimates of Rs1,227 billion for the year 2019-20. If Government cut defence Budget, what happens to saving, investment, the trade balance, the interest rate, inflation rate and the exchange rate? And similarly, Government decreases the interest rate due to COVID-19 so explain what impact on consumption, investment and interest rate. Justify the answer with your own word and examples.In the economy of Carpathia: Consumption =850 billion Government purchase of goods and services = 100 billion Import = 125 billion Investment spending= 75 billion Exports = 100 billion. Taxes= 50 billion —There are no government transfers payment. — set an open a close economy given the provided data table? —Compute the following based on the data in the table above. A) GDP in Carpathia B) National savings in Carpathia: C) Net capital inflow into Carpathia: D) The savings-investment spending identity for the Carpathian economy5. Saving and net flows of capital and goods In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem, you will explore how saving and investment are connected to the international flow of capital and goods in an economy. Before delving into the relationship between these various components of an economy, you will be asked to recall some relationships between aggregate variables that will be useful in your analysis. Recall the components that make up GDP. National income (Y) equals total expenditure on the economy's output of goods and services. Thus, where C = consumption, I = investment, G = government purchases, X = exports, M = imports, and NX = net exports: Y = Also, national saving is the income of the nation that is left after paying for Therefore, national saving (S) is defined as: S = Rearranging the previous equation and solving for Y yields Y = Plugging this into the original equation showing the various…
- 5. Saving and net flows of capital and goods In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem, you will explore how saving and investment are connected to the international flow of capital and goods in an economy. Before delving into the relationship between these various components of an economy, you will be asked to recall some relationships between aggregate variables that will be useful in your analysis. Recall the components that make up GDP. National income (Y) equals total expenditure on the economy's output of goods and services. Thus, where C = consumption, I = investment, G = government purchases, X = exports, M = imports, and NX = net exports: Y = Also, national saving is the income of the nation that is left after paying for saving (S) is defined as: S = Rearranging the previous equation and solving for Y yields Y = results in the following relationship: S This is equivalent to S= . Therefore,…5. Saving and net flows of capital and goods In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem, you will explore how saving and investment are connected to the international flow of capital and goods in an economy. Before delving into the relationship between these various components of an economy, you will be asked to recall some relationships between aggregate variables that will be useful in your analysis. Recall the components that make up GDP. National income (Y) equals total expenditure on the economy's output of goods and services. Thus, where C = consumption, I = investment, G = government purchases, X = exports, M = imports, and NX = net exports: Y = Also, national saving is the income of the nation that is left after paying for Therefore, national saving (S) is defined as: S = Rearranging the previous equation and solving for Y yields Y = . Plugging this into the original equation showing the…5. Saving and net flows of capital and goods In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem, you will explore how saving and investment are connected to the international flow of capital and goods in an economy. Before delving into the relationship between these various components of an economy, you will be asked to recall some relationships between aggregate variables that will be useful in your analysis. Recall the components that make up GDP. National income (Y) equals total expenditure on the economy's output of goods and services. Thus, where C = consumption, I = investment, G = government purchases, X = exports, M = imports, and NX = net exports: Y = Also, national saving is the income of the nation that is left after paying for . Therefore, national saving (S) is defined as: S = Rearranging the previous equation and solving for Y yields Y = Plugging this into the original equation showing the…
- Urgently need. Y = C + I + G + NX Y=$6000 G=$1000 T=$1150 C=$200+0.75(Y−T) I=1100−50r NX=913−913ε r=r*=7r=r*=7 b. Suppose now that G rises to $1400. Solve for private saving, public saving, national saving, investment, the trade balance, and the equilibrium exchange rate.7. For each of the following, specify whether the foreign direct investment is hori- zontal or vertical; in addition, describe whether that investment represents an FDI inflow or outflow from the countries that are mentioned. a. Vodafone (a U.K.-based company) plans to improve its network and services in Romania after the results in this market lagged behind other countries. b. General Electric (an American company) buys Alstom (another American company) energy assets. c. Exxon (an American company) plans the construction of new delayed coker unit in Belgium. d. PetroChina (a Chinese company) plans to invest in global oil and natural gas assets in a venture in Western Australia.The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Value National Income Account (Millions of dollars) Government Purchases (G) 100 Taxes minus Transfer Payments (T) 90 Consumption (C) 250 120 Investment (I) National Saving in this economy is ○ a. $560 million Ob. $470 million O c. $120 million Od. $90 million
- The following graphs depict the market for loanable funds and the relationship between the real interest rate and the level of net capital outflow (NCO) measured in terms of the Mexican currency, the peso. The Market for Loanable Funds in MexicoDemandSupply012345678987654321REAL INTEREST RATE (Percent)LOANABLE FUNDS (Billions of pesos)Demand Supply Mexican Net Capital OutflowNCO-4-3-2-10123456987654321REAL INTEREST RATE (Percent)NET CAPITAL OUTFLOW (Billions of pesos)NCO Complete the first row of the table to reflect the state of the markets in Mexico. Real Interest Rate Net Capital Outflow (NCO) (Percent) (Billions of pesos) Initial state After capital flight Now, suppose that Mexico experiences a sudden bout of political turmoil, which causes world financial markets to become uneasy. Because people now view Mexico as unstable, they decide to pull some of their assets out of Mexico and put them into more…a Figure 1 shows the exogenous world interest rate (r*) determines the level of investment (I) and the difference between saving (S) and investment determines net capital outflow and net exports (NX) for a small open economy. What would happen to I, NX and S if: i. The government of this small open economy uses expansionary fiscal policy. ii. The government of other countries (abroad) uses contractionary fiscal policy. b Suppose the price of a cup of tea is Rs.50 in Pakistan and $2 in USA, the value of nominal exchange rate is $0.006364 per PKR. Calculate the value of real exchange rate (ε) and interprete its meaning. Also, discuss the relationship between net exports (NX) and real exchange rate. c Briefly explain the theory of purchasing power parity (PPP) with the help of example.Suppose that we’re in an open economy with this situation: - C = $85.890 - I = $125.000 - G = $56.700 - X = $65.000 - M = $55.000 - T = $60.000 Calculate GDP, national saving, private saving, and public saving. Does it has budget deficit or budget surplus?