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.

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Definitions:

Biological

Related to the study of living organisms and their vital processes, often emphasizing genetic and physiological attributes.

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates.

Heredity

The passing of traits from parents to their offspring, either through asexual or sexual reproduction.

Nurture

The influence of external factors after conception, such as environmental and educational experiences, on personal development.