Consider a Simple Macro Model with a Constant Price Level

question 78

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.The equations of the model are: C = 60 + 0.43Y,I = 150,G = 260,T = 0,X = 90,IM = 0.06Y.The trade balance at equilibrium national income is

• A)a deficit of 36.67.
• B)a deficit of 21.43.
• C)zero.
• D)a surplus of 21.43.
• E)a surplus of 36.67.

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Definitions:

Restrictions

Rules or limitations placed on activities, movements, or trade to control or regulate actions.

World Price

The international market price at which goods are traded between countries; it plays a crucial role in determining local prices and trade policies.

Exported

Goods or services sent from one country to another for sale or trade.

Imported

Goods or services brought into one country from another for sale or use.