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aq27Mar1 - 1,700 4.How much foreign finance is being used...

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Name [ last, first] SS# Suppose you are given the following information on the US Economy, all in billions of dollars: C I G X M S T 8,50 0 2,10 0 2,30 0 2,40 0 1,90 0 2,100 [Y = C + I + G + (X – M) = C + S + T] 1.What are imports, M? I + G + X – (S + T) = M, so M is 2,100 + 2,300 + 2,400 – (1,900 + 2,100) = 6,800 – 4,000 = 2,800 2.What is government saving? Govt saving is (T – G) = 2,100 – 2,300 = -200 3.What is national saving? Nat saving is S + (T - G) = 1,900 + (-200) =
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Unformatted text preview: 1,700 4.How much foreign finance is being used to finance US investment? Investment minus national saving must be financed by foreigners; that is, 2,100 – 1,700 = 400 5.What is the trade balance? 2e7da1963f10c90ead5ea0d3b58ff35b8e158214.doc (X – M) = 2,400 – 2,800 = -400 Remember to put negative signs where needed. 2e7da1963f10c90ead5ea0d3b58ff35b8e158214.doc...
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