1. Dene Gross National Expenditure in words and state it in equation form.
2. Dene the trade balance in words and state it in equation form.
3. Dene net factor income from abroad in words and state it in equation form.
4. What is Gross National Income equal to in a closed economy? What about in an open economy?
5. Dene net unilateral transfers in words and state it in equation form.
6. What is Gross National Disposable Income equal to?
7. What is the nancial account equal to?
8. What are the total national resources available for expenditure in an open economy equal to (hint: sum of three terms)?
9. What is the current account equal to (hint: sum of three terms)?
10. Show how accounting for net taxes and government spending the current account can be interpreted in terms of private savings, public savings, and investment.
11. Does an increase in public spending necessarily cause a decrease in the current account? Explain mathematically.
12. What is the balance of payments identity? Show mathematically why this identity holds.