Find the country's national saving, investment spending, desired consumption and absorption. Then calculate current account balance using both intertemporal model and absorption approach.

Q: Based on the transactions in the above table, what is the change in the U.S. current account…

A: Current account balance = Export of goods and services – Import of goods and services + Net…

Q: Under fixed exchange rate system and small open economy, expansionary fiscal policy is effective…

A: Under fixed exchange rate system and small open economy, expansionary fiscal policy is effective…

Q: Suppose that Country A developing country and Country B is a developed country and Country B's…

A: There is appreciation of exchange rate in country A.

Q: Given the following data: Desired Investment P: $300 Current Account Balance CA: $– 270 Net Exports…

A: Given: Id=$300 CA=$-270 NX=$-270 Y=$1200 G=$200 To find: Cd and domestic consumption

Q: Savings by households 10 percent Savings by businesses 15 percent Private investment 19 percent Net…

A: Calculation of current account balance .

Q: Suppose that China is a developing country and United States of America is a developed country. In…

A: Exchange rate is the price of a currency of one country in terms of the currency of another country.…

Q: What is the real exchange rate, and how are fluctuations in the real exchange rate related to…

A: The product of the nominal exchange rate (for example, the dollar cost of a euro) and the price…

Q: Consider a small open economy currently in a steady state with zero net exports and investment of…

A: In a nation, an excess of investments domestically over the savings can result in a situation of a…

Q: How do the nominal exchange rate and the real exchange rate differ? How do we find the real exchange…

A: The exchange rate is a rate at which one currency is exchanged for another. It helps to find the…

Q: Nominal exchange rate Real exchange rate Spot rate

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Why could a current account deficit stimulate an economy? List at least two reasons and explain with…

A: Current account deficit The current account deficit is a situation in the economy of a country…

Q: With the help of an IS-LM diagram explain and show why a cut in government spending has a larger…

A: Under a fixed exchange rate system and perfect capital mobility ,the cut in the governtment spending…

Q: iscuss the difference in GDP per capita using the two different exchange rates. Which one is larger?…

A: GDP is the total value of goods and services that are produced in the country.

Q: As a result of entering the world economy, Neverland experiences economic boom and its GDP goes up…

A: In the question above, it is given that : Y = 13250 C = 5000 - 1000 r + 0.25 Y    = 5000 - 1000 r +…

Q: In a small open economy, NSd = $10 billion + $100 billionxE. Id = $15 billion - $100 billionXrw Y =…

A: National savings = $10 billion + $100 billion * 0.05                            = $15 billion…

Q: d is recorded bin the capital account of BOP" True/False

A: Bop , which stands for balance of payments, is the way a country makes record of its economic…

Q: In a large open economy, the home country's saving and investment equations are: sd=200+ 1400r" and…

A: Answer in step 2

Q: Explain the theory of purchasing power parity (PPP). Based on this theory, what is a general…

A: Purchasing power parity came from believes of right to exchange  for all the individuals at any part…

Q: Distinguish between Exchange Rate Method and Purchasing Power Parity as methods of comparing Country…

A: The measure that depicts the rate of one currency being measured in terms of another currency is…

Q: Explain why the Cedi continues to depreciate against most major international currencies and offer…

A: Currency depreciation, which often occurs under a floating exchange rate system when no official…

Q: In the open-economy IS-LM model, an increase in the domestic interest rate r will, other things…

A: The IS-LM (Investment Savings-Liquidity Preference Money Supply) model is concerned with the…

Q: An analyst estimates the following exchange rate model for the yen currency against the dollar:…

A: Interest rate differential measures the difference between interest rate in two countries.

Q: in the international market, if its A nation is considered to be a(n) current account is in deficit.…

A: Current Account is one of the components of Balance of Payment. Current account depicts about the…

Q: ings by businesses 12 percent Private investment 18 percent Net taxes paid 15 percent Government…

A: * ANSWER :-

Q: Suppose that national saving is $1568 billion, investment is $1835 billion, and private saving is…

A: Answer to the question is as follows:

Q: QUESTION 10 In a large open economy, the home country's saving and investment equations are: sd=200+…

A: Home Country S = 200 + 1400r I = 300 - 400r Foreign Country S = 50 + 600r I = 75 - 100r

Q: with aid of a diagram defend claims that a weak currency can help the domestic economy from a…

A: Depreciation of domestic currency makes imports expensive and exports cheaper.

Q: Exports of goods and services imports of goods and serviİces Net incurrence of financial assets 2550…

A: The current account balance would be one of the main part of the balance of payments. The current…

Q: In the Mundell–Fleming model with fixed exchange rates; i) what happens to aggregate income, the…

A: i) In the Mundell–Fleming model with fixed exchange rates, where aggregate income, the exchange…

Q: Consider the following annual transactions in Canada's current account. If Canadian exports of goods…

A: The export, import, assets income and transfers payments are part of the current account.

Q: Would each of the following transactions be includedin U.S. net exports or in U.S. net capital…

A: Net exports are the difference between the country's exports and imports.  Net capital outflow…

Q: A higher level of GDI relative to the country's absorption level contributes to a higher current…

A: In economics, GDI stands for Gender Development Index, which explains the expansion of ability of…

Q: If the balance on the current account is $8.42 billion and the balance on the financial account is…

A: Given; Balance of current account= $8.42 billion Balance of financial account= $7.43 To find:-…

Q: Explain purchasing power parity's importance when comparing countries.

A: The purchasing power(PP) of a currency is the amount of currency required to buy a good or basket of…

Q: Evaluate the usefulness of relative power purchasing parity (PPP) in predicting movements in foreign…

A: Purchasing power parity compares the value of the market basket from one country to another country.…

Q: otherwise downvote switches from a flexible exchange rate regime to a fixed exchange rate regime,…

A: The monetary policy is not an effective when a country follow the fixed exchange rate system.  The…

Q: Write the difference between capital account and current account

A: Concept of balance on current account and balance on capital account are always interrelated to each…

Q: A country finds itself in the following situation: a government budget deficit of $700; total…

A: ANSWERThere are two main sources for the supply of financial capital in the U.S. economy: saving by…

Q: Suppose an economy’s national accounts are GNP = 100, C = 70, I = 40, G = 20 and EX = 20 where GNP…

A: The GNP can be calculated as follows: Thus, the import (IM) is 50. Current account balance can be…