Question

The data in columns 1 and 2 in the table below are for a private closed economy Instructions: For all parts, enter your answers as whole numbers it you are entering any negative numbers be sure to include a negative sign H in front of those numbers a Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4 Fill in the gray shaded cells in columns 5 and 6 134 Real Domestic Output GOP-D xenditures, P Cioned Econmy,.Bifions ports, Bilions Nat Esgorts p Private Open $30 300 $330 $20 410 $450 $30 5530 $570 Determine the equlibrium GDP for the open economy Prev13 of 16 E Next O Type here to search Fleantx O McGraw-Hill Connect c. Given the original $20 billion level of exports, what would be net exports and the equilibrium GDP greater at each level of GDP? Fill in the gray-shaded cells. Aggregate Net Exports Billions Real Domestic Exports Billions Imports, Billions Output (GDP - Diues,Privae Closed Economy $250 $330 $300 370 5350 $410 $400 $450 5450 $500 540 $550 d. What s the mutiplies in this example

Answer 1

Q. a). Equilibrium GDP = $ 450 Billion.

Explanation :- At equilibrium GDP of $ 450 Million, Amount of aggregate expenditures are equal to Real domestic output amounting to $ 450 billion each.

Q. b). Net exports = Exports - Imports.

= 20 - 30

= (-) 10

Real GDP	Aggregate expenditure	Net exports	Aggregate expenditure (including net exports)
250	290	(-) 10	280 [ 290 + (-) 10 ]
300	330	(-) 10	320 [ 330 + (-) 10 ]
350	370	(-) 10	360 [ 370 + (-) 10 ]
400	410	(-) 10	400 [ 410 + (-) 10 ]
450	450	(-) 10	440 [ 450 + (-) 10 ]
500	490	(-) 10	480 [ 490 + (-) 10 ]
550	530	(-) 10	520 [ 530 + (-) 10 ]
600	570	(-) 10	560 [ 570 + (-) 10 ]

Equilibrium GDP = $ 400 Billion (Amount of aggregate expenditures including net exports are equal to Real domestic output amounting to $ 400 billion each.)

Q. c). Net exports = Exports - Imports.

= 20 - 40

= (-) 20

Real GDP	Aggregate expenditure	Net exports	Aggregate expenditure (including net exports)
250	290	(-) 20	270 [ 290 + (-) 20 ]
300	330	(-) 20	310 [ 330 + (-) 20 ]
350	370	(-) 20	350 [ 370 + (-) 20 ]
400	410	(-) 20	390 [ 410 + (-) 20 ]
450	450	(-) 20	430 [ 450 + (-) 20 ]
500	490	(-) 20	470 [ 490 + (-) 20 ]
550	530	(-) 20	510 [ 530 + (-) 20 ]
600	570	(-) 20	550 [ 570 + (-) 20 ]

Equilibrium GDP = $ 350 Billion (Amount of aggregate expenditures including net exports are equal to Real domestic output amounting to $ 350 billion each.)