Assume That the Following Equations Characterize a Large Open Economy

question 50

Essay

Assume that the following equations characterize a large open economy:
(1) Y = 5,000
(2) Y = C + I + G + NX
(3) C = 1 / 2 (Y - T)
(4) I = 2,000 - 100r
(5) NX = 500 - 500ε
(6) CF = -100r
(7) CF = NX
(8) G = 1,500
(9) T = 1,000
where NX is net exports, CF is net capital outflow, and ∈ is the real exchange rate.
Solve these equations for the equilibrium values of C, I, NX, CF, r, and ε.

---

Definitions:

Constructive Nature

The concept that individuals construct understanding and knowledge of the world through experiences and reflections.

Alzheimer's Disease

A progressive neurodegenerative disorder characterized by memory loss, cognitive impairment, and behavioral changes.

Elated

Feeling or expressing great joy or happiness, often as a result of a particular event or accomplishment.

Material

Substances or objects that are used to make things, or the content and information provided or studied in academic and practical contexts.