Answered

Discover answers to your questions with Westonci.ca, the leading Q&A platform that connects you with knowledgeable experts. Explore a wealth of knowledge from professionals across various disciplines on our comprehensive Q&A platform. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

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
We appreciate your time. Please come back anytime for the latest information and answers to your questions. We appreciate your time. Please come back anytime for the latest information and answers to your questions. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.