In a Small Open Economy

question 31

Essay

In a small open economy,
S^d = $5 billion + ($100 billion)r^w,
I^d = $10 billion - ($50 billion)r^w,
Y = $50 billion,
G = $3 billion,
r^w = .06.
(a)Calculate the current account balance.
(b)Calculate net exports.
(c)Calculate desired consumption.
(d)Calculate absorption.

Identify the principles of a balanced and complementary diet.

Recognize the major functions and sources of essential micronutrients.

Comprehend the basics of metabolic rates and energy utilization in organisms.

Understand the relationship between specific vitamins/minerals and deficiency diseases.

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Definitions:

Elasticity Positive

Positive elasticity indicates that when the price of a good or service increases, the quantity demanded increases, or vice versa, showing a direct relationship between price and demand.

Income Elasticity

The responsiveness of the demand for a good to a change in an individual’s income.

Normal Good

A type of good for which demand increases as the income of the consumer increases, showing a positive correlation between income and demand.

Cross-price Elasticity

A measure of how the demand for one product changes in response to a price change of another product, indicating substitutes or complements.