i) In an open economy, Y = C + I + G + NX. Using symbols from this identity, write an expression that defines national saving, S, in an open economy. S = _________________________ .  ii) True or False? In an open economy, the following is always true: S = I + NCO, where I is investment spending and NCO is net capital outflow.  iii)  In an open economy, a country’s net capital outflow is: a.) the value of domestic assets purchased by foreigners minus the value of foreign assets purchased by domestic residents b.) the value of foreign assets purchased by domestic residents minus the value of domestic assets purchased by foreigners.

Q: 5. Saving and net flows of capital and goods In a closed economy, saving and investment must be…

A: Investing, trading, or running a business all involve the movement of capital. Investment capital,…

Q: Consider the following open economy SI model set up Y = 18000 C = 300 + 0.8(Y − 2500) I = 3500 −…

A: (a) C = 300 + 0.8(Y-2500) Put Y = 18000 => C = 300 + 0.8(18000 - 2500) => C = 300 + 12400…

Q: Would each of the following transactions be included in net exports or net capital outflow? Be sure…

A:

Q: In year 1, a country has saving rates s = 0.1, productivity A = 2 and depreciation rate d = 0.1. In…

A: By endogenous growth model we typically refer to the AK model, where the production function is…

Q: In an open economy, national saving equalsdomestic investmenta. plus the government’s budget…

A: An open economy represents that economy that establishes contact with the rest of the world in terms…

Q: Assume that in a small open economy where full employment always prevails, national saving is 500.…

A: Answer:- At the world interest rate, the investment would be 540

Q: In the Model of Open Economy (Figure 1 below), use Saving (S), Investment (1). Net Export (NX), Net…

A: Here, some of the economic activities are mentioned as demand and supply of loanable funds, and…

Q: Assume that GDP (Y) is 6,500, which is also the full employment level of real GDP. Consumption (C)…

A: Consumption refers to buying goods or services for use by households. The consumption equation gives…

Q: a) The GDP deflator measures the ratio of nominal GDP to the real GDP. What is the value of the GDP…

A: BALANCE OF PAYMENT is the account which records the  monetary transaction amongst countries.

Q: Which of the following statements concerning long-run national saving is true?

A:

Q: Assume an economy without population growth or technological progress. Their production function is…

A: The relationship between capital, savings and population is explained by the Solow growth model

Q: In a small open economy, output is $25 billion, government purchases are $6 billion, taxes are $5…

A: Given  Y=$25 billion Government purchases G=$6 billion taxes T=$5 billion C=2+0.6(Y-T)

Q: 6. Suppose Zambia is an open economy in the long run described by the following equations:…

A: Equilibrium in the market occurs where output equals aggregate expenditure

Q: Suppose that we’re in an open economy with this situation: - C = $85.890 - I = $125.000 - G =…

A: GDP = C + I + G + (X - M)GDP = 85,890 + 125,000 + 56,700 + (65,000 - 55,000)GDP = 277,590

Q: The exchange rate ensures that the balance of payments really does balance.   a. True   b. False

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Consider the following hypothetical open economy. According to the expenditure approach, for this…

A: Given:S=0.3YI=0.2YNet capital outflow=$1 trillion

Q: Poland, after its transformation into a market economy in the early 90's, has consistently been…

A: Economy: It refers to the place under which the people exchange goods and services. The economy is…

Q: You are given the following information about an economy : Gross private domestic investment =. 40…

A: Net factor income is the difference between the factors income received from the rest of the world…

Q: Neptune country is an open economy with GDP of $11,000, consumption of $4,500, and government…

A: In an economy, equilibrium GDP is the one that will be equal to the aggregate demand of that…

Q: Consider a classical economy. Assume that the GDP of an economy is 9000. Consumption is given by the…

A: GDP = 9000 C = 600 + (3/4)YD -40r I = 1200 - 120r NX = 1500 - 200e Budget deficit = 500 Government…

Q: ) True or False? In Mankiw’s model of an open economy, the demand for loanable funds has two…

A: a) Mankiw's model of an economy, the demand for loanable funds has two components: one is the need…

Q: It is known that the Indonesian economy can be written into the following equations: Y -C+1+G+ NX Y…

A: Y=8000 G=2500 T=2000 C=500+2/3(Y-T) I=900-50r NX=1500-250E r=r*=5

Q: 5. Saving and net flows of capital and goods In a closed economy, saving and investment must be…

A: Aggregate output is the sum of consumption, investment, government spending and net exports in an…

Q: We showed in Eq. (2.10) that S =1 + CA, where S is national saving, I is investment, and CA is the…

A: The balance of payment is the record of all transactions between the residents of a country and the…

Q: 5. Saving and net flows of capital and goods In a closed economy, saving and investment must be…

A: In the circular economy, money is utilized to purchase goods and services. Goods and services go in…

Q: The graph on the right shows output per worker f(K/N). investment per worker sf (K./N), and…

A: Given information At initial level government budget is balanced G=T G--- government spending T---…

Q: Use the equations for public and prívate saving to demonstrate how total saving equals investment…

A: PUBLIC SAVING = T-G PRIVATE SAVING = Y-T-C TOTAL SAVING = PUBLIC SAVING + PRIVATE SAVING  i.e. Total…

Q: and Use the data above to calculate: Consumption = $ %3D In a closed economy, the loanable funds…

A: We are going to solve for equilibrium in case of Open economy and Closed economy.

Q: Holding other things constant, an increase in anation’s interest rate reducesa. national saving and…

A: The final determination of the exchange rate of a currency with other currencies is the product of a…

Q: In an open economy, national saving equals domesticinvestmenta. plus the net outflow of capital…

A: An open economy is one that is open to trade with other economies. International trade refers to the…

Q: Assume the following information for an imaginary, closed economy.   GDP = $120,000;…

A: GDP is equal to $120,000. private saving equal $9,000 and the national saving equal $12,000.

Q: 10.Suppose in a small open economy, real GDP is $500 billion, consumption is $300 billion,…

A: GDP=Y=$500 C=$300 I=$120

Q: A large open economy has desired national saving of Sd = 20 + 200 rw and desired national investment…

A: Given:NationalSd=20+200rwId=75-200rwForeign:SdFor=40+100rwIdFor=75-400rw

Q: 7. When demand for dollars in foreign countries increases, the value of the dollar: A) decreases…

A: The value of a dollar depends on the supply and demand of the dollar in the foreign market. The…

Q: Multiple choice question In a small economy the difference between saving and investment…

A: An open economy is such an economy in which the equilibrium interest rate is the world interest…

Q: Question Tow: (B3, D2, D4) Given the consumption, Investment, Government spending, assuming this…

A: 3) Equilibrium consumption isthwt were AD is equivalent to AS HERE, AS = Y = C+S AD = Expenditure =…

Q: Draw areal symbols (circles) to represent the GNP per capital. Draw these relevent places on the…

A: The value of all goods and services produced by a nation's citizens and enterprises, regardless of…

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…

Q: Consider the following data for MILESTONES, a hypothetical economy and nation-state. GDP = 8500…

A: National savings = Private savings + Public savings. Current account balance = (Export - Imports) +…

Q: Compare the impact on investment spending of an increase in the government’s budget deficit in a…

A: In an open economy there would be trade,whereas in the closed economy there is no trade. Therefore…

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.