Consider a Small Open Economy with Desired National Saving of Sd

question 23

Multiple Choice

Consider a small open economy with desired national saving of Sd = 200 + 10,000rw and desired investment of Id = 1,000 - 5,000rw.If rw = 0.05,then a rise in government spending of 50 with no change in private saving causes net exports to become

• A)100.
• B)50.
• C)-50.
• D)-100.

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Definitions:

Economic Condition

The state of an economy at a given time, including factors like inflation, unemployment, and growth rates.

City

A large human settlement generally characterized by significant population density, economic activities, and a developed infrastructure.

State

Refers to a politically organized body of people under a single government, or a specific condition or mode of being.

Region

A geographic area defined by natural, political, or cultural characteristics.