Write down your understanding and interpretation for each of the following equations, then make sure that you familiarize yourself with these formulas: I = SP + SG + (M-X), in an open economy
What will be an ideal response?
Answer: In an open economy, investment spending equals the sum of national savings and capital inflows, where national savings and capital inflows are regarded as domestic savings and foreign savings separately. That is, domestic savings and foreign savings are the two sources of savings in an economy.
Saving-investment identity states that saving is always equal to investment whether the economy is a closed economy with no international trade or an open economy with trade.
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If the government of a country owes $3,500 billion to the International Monetary Fund and then borrows $300 billion more this year, it implies that the: a. national debt is $300 billion and fiscal deficit is $3.8 trillion. b. national debt is $3,800 billion and fiscal deficit is $300 billion. c. national debt is $4,100 billion
d. fiscal deficit is $3,800 billion. e. national debt and fiscal deficit both equal $3.8 trillion.
According to New Keynesians, why can firms increase output in the short run in response to higher prices?
What will be an ideal response?
Use the following table to determine which statement is true.YearSurplus or deficit (?) billions of dollars1946?15.919474.0194811.819490.91950?3.1
A. From 1945 to 1950, the debt rose by $2.3 billion. B. The budget deficit in 1950 was $2.3 billion. C. From 1946 to 1950, the U.S. debt was $2.3 billion. D. In 1950, the U.S. debt was $2.3 billion.
Planned investment is $20 billion and saving is $15 billion when GDP in the economy is $180 billion. The economy is:
A. At the equilibrium level of GDP B. In disequilibrium and its GDP will increase C. In disequilibrium and its GDP will decrease D. Having a GDP level that is greater than its aggregate expenditures