In a Small Open Economy

question 30

Essay

In a small open economy,
S^d = $20 billion + ($100 billion) r%
I^d = $30 billion - ($100 billion) r%
Y = $70 billion
G = $20 billion
r^w = .04.
a. Calculate the current account balance.
b. Calculate net exports.
c. Calculate desired consumption.
d. Calculate absorption.

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