Consider the following information for Country 2:
GDP = 1600; Absorption = 1500; Unemployment Rate = 4%; Net UT = (-)150
A. Calculate the value of Country 2's Current Account (CA). Show all your calculations to obtain full credit.
B. Calculate the value of Country 2's Net Exports (X-M). Show all your calculations to obtain full credit.
C. Is Country 2:
1. In a position of External Balance? (YES /NO / NEED MORE INFORMATION)
2. In a position of Internal Balance? (YES / NO / NEED MORE INFORMATION)
D. Country 2 is likely to be (select ALL that apply)
1. Accumulating International Reserves
2. Accumulating External Debt
3. Running down its holdings of International Reserves
4. Acquiring Financial Assets in the ROW
5. Selling off its Real Assets to the ROW
6. Accumulating Net Foreign Assets
7. Purchasing Real Assets in the ROW
8. Running down its holdings of Net Foreign Assets