Answered

At Westonci.ca, we make it easy for you to get the answers you need from a community of knowledgeable individuals. Explore our Q&A platform to find in-depth answers from a wide range of experts in different fields. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

In a small open economy, output (gross domestic product) is $25 billion, government purchases are $6 billion, and net factor payments from abroad are zero. Desired consumption and desired investment are related to the world real interest rate in the following manner:
World Real Interest Rate Desired Consumption Desired Investment
5% $12 billion $3 billion
4% $13 billion $4 billion
3% $14 billion $5 billion
2% $15 billion $6 billion
For each value of the world real interest rate, find national saving, foreign lending, and absorption. Calculate net exports as the difference between output and absorption. What is the relationship between net exports and foreign lending?

Sagot :

Parrain

Answer:

Consumption is given.

Investment is also given.

Government spending is $6 billion.

GDP is $25 billion.

National Saving = GDP - Consumption - Government spending

Foreign lending = Savings - Investment

Absorption = Consumption + Investment + Government spending

Net Exports = GDP - Absorption

The relationship/ correlation between Net Exports and Foreign Lending is one that is perfectly positive as both measures are exactly the same.  

View image Parrain
Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. We appreciate your time. Please come back anytime for the latest information and answers to your questions. Thank you for visiting Westonci.ca. Stay informed by coming back for more detailed answers.