--%>
Assignment Help - homework help

Equilibrium GDP for the open economy

The data of columns 1 and 2 of the given table are for private closed economy. Open up this economy to international trade through including the export & import figures of columns 3 and 4.  Fill  up in columns 5 and 6 to find out the equilibrium GDP for the open economy. Describe why this equilibrium GDP varies from that of the closed economy.

365_Private closed economy.png

E

Expert

Verified

Net export data for column 5 (top to bottom); $-10 billion in every space. Aggregate expenditure data for column 6 (top to bottom): $230; $270; $310; $350; $390; $430; $470; $510. For the open economy equilibrium GDP is $350 billion, $50 billion below the $400 billion equilibrium GDP for the closed economy. The $-10 billion of overall exports is a leakage which reduces equilibrium GDP by $50 billion. 

   Related Questions in Finance Basics

  • Q : Explain Financial Reporting Financial

    Financial Reporting: It is a set of documents made generally by government agencies at the end of accounting period. It usually enclose summary of accounting data for that time period, with background forms, notes, and other information.

  • Q : Question based on consolidated balance

    Normal 0 false false

    		•
  • Q : Question on aggregate supply Normal 0

    Normal 0 false false

  • Q : Describe the Hirfindahl-Hirschman Index

    Describe the Hirfindahl-Hirschman Index?The Hirfindahl-Hirschman Index, or HHI, is the standard measure employed by economists to evaluate market concentration. The greater the level of concentration amongst competitors, the higher the HHI. The

    		•
  • Q : Describe the bird in the hand theory of

    Describe the bird in the hand theory of cash dividends. The bird in the hand dividends theory says that dividends attained now are better than a promise of future dividends. Uncertainty is resolved while a dividend is paid.

    		•
  • Q : What is a fund Fund: A lawful budgeting

    Fund: A lawful budgeting and accounting entity which offers for the segregation of moneys or other resources in the State Treasury for obligations in accordance with particular restrictions or limitations. A separate set of accounts should be maintain

    		•
  • Q : Describe Schedule 10 Schedule 10 :

    Schedule 10: (Supplementary Schedule of Appropriations): The Department of Finance control document listing all the appropriations and allocations of funds accessible for expenditure throughout the past, present, and budget years. Such documents are s

    		•
  • Q : Equilibrium GDP for the open economy

    Normal 0 false false

  • Q : Explain Section 26.00 Section 26.00 :

    Section 26.00: It is a Control Section of Budget Act which gives the authority for the transfer of funds from one class, program or function in a schedule to the other category, program or function in the similar schedule, subject to particular limita

    		•
  • Q : Mascot Simulation Simulation with

    Simulation with Crystal Ball Provided Workbook: Mascot Simulation Relevant Readings:"Discounted Cash Flow Modeling" folder + Text

    		•