The data in columns 1 and 2 in the table below are for a private closed...

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Economics

The data in columns 1 and 2 in the table below are for a privateclosed economy.
GDP
A.E. Private Closed Economy
Exports
Imports
Net Exports
A.E. Private Open Economy
200
240
20
30
250
280
20
30
300
320
20
30
350
360
20
30
400
400
20
30
450
440
20
30
500
480
20
30
550
520
20
30
a. Use columns 1 and 2 to determine the equilibrium GDP for thishypothetical economy.
b. Now open up this economy to international trade by includingthe export and import figures of columns 3 and 4. Fill in columns 5and 6 and determine the equilibrium GDP for the open economy. Whatis the change in equilibrium GDP caused by the addition of netexports?
c. What is the multiplier in this example?

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4.4 Ratings (703 Votes)

a Closed economy equilibrium occurs at the point where GDP AE private closed economy Therefore the closed economy equilibrium GDP is 400 b GDP AE private closed economy See Answer

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GDP	A.E. Private Closed Economy	Exports	Imports	Net Exports	A.E. Private Open Economy
200	240	20	30
250	280	20	30
300	320	20	30
350	360	20	30
400	400	20	30
450	440	20	30
500	480	20	30
550	520	20	30