TABLE OF CONTENTS

Question 1 of 3

Work It Out
true
true
You must read each slide, and complete any questions on the slide, in sequence.

Consider an economy described by the following equations: Y = C + I + G + NX, Y = 5,000, G = 1,000, T = 1,000, C = 250 + 0.75(YT), I = 1,000 – 50r, NX = 500 – 500ε, r = r* = 5.

In this economy, solve for private saving, public saving, national saving, investment, the trade balance, and the equilibrium exchange rate.

Private Saving =

Public Saving =

National Saving =

Investment =

Net Exports (Trade Balance) =

Exchange Rate =

Review Chapter 5 for a discussion of the determinants of saving, investment, net exports, and the exchange rate in the small open economy.
Review Chapter 5 for a discussion of the determinants of saving, investment, net exports, and the exchange rate in the small open economy.
Video Player is loading.
Current Time 0:00
Duration 0:00
Loaded: 0%
Stream Type LIVE
Remaining Time 0:00
 
1x
    • Chapters
    • descriptions off, selected
    • captions off, selected

      Consider an economy described by the following equations: Y = C + I + G + NX, Y = 5,000, G = 1,000, T = 1,000, C = 250 + 0.75(YT), I = 1,000 – 50r, NX = 500 – 500ε, r = r* = 5.

      Suppose now that G rises to 1,250. Solve for private saving, public saving, national saving, investment, the trade balance, and the equilibrium exchange rate.

      Private Saving =

      Public Saving =

      National Saving =

      Investment =

      Net Exports (Trade Balance) =

      Exchange Rate =

      Review Chapter 5 for a discussion of the determinants of saving, investment, net exports, and the exchange rate in the small open economy.
      2:58
      Video Player is loading.
      Current Time 0:00
      Duration 0:00
      Loaded: 0%
      Stream Type LIVE
      Remaining Time 0:00
       
      1x
        • Chapters
        • descriptions off, selected
        • captions off, selected

          Consider an economy described by the following equations: Y = C + I + G + NX, Y = 5,000, G = 1,000, T = 1,000, C = 250 + 0.75(YT), I = 1,000 – 50r, NX = 500 – 500ε, r = r* = 5.

          Now suppose that the world interest rate rises from 5 to 10 percent. (G is again 1,000.) Solve for private saving, public saving, national saving, investment, the trade balance, and the equilibrium exchange rate.

          Private Saving =

          Public Saving =

          National Saving =

          Investment =

          Net Exports (Trade Balance) =

          Exchange Rate =

          Review Chapter 5 for a discussion of the determinants of saving, investment, net exports, and the exchange rate in the small open economy.
          2:58
          Video Player is loading.
          Current Time 0:00
          Duration 0:00
          Loaded: 0%
          Stream Type LIVE
          Remaining Time 0:00
           
          1x
            • Chapters
            • descriptions off, selected
            • captions off, selected