# aq27Mar2 - 1,500 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 1,90 0 2,30 0 2,20 0 1,70 0 2,100 [Y = C + I + G + (X – M) = C + S + T] 1. What are imports, M? From above, I + G + (X –M) = S + T, so M = (I + G + X) – (S + T) = 6,400 – 3,800 = 2,600. 2.What is government saving? T – G = 2,100 – 2,300 = -200 3. What is national saving? Private Saving + Government Saving = S + (T –G) = 1,700 + (-200) =

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Unformatted text preview: 1,500 4. How much foreign finance is being used to finance US investment? Investment is financed by national saving or foreign finance, so the foreign finance used for US investment is I – national saving = 1,900 – 1,500 = 400 5.What is the trade balance? (X – M) = 2,200 – 2,600 = 9317b4c8dd3a1ab5e15178bef458298b44818581.doc-400 Remember to put negative signs where needed. 9317b4c8dd3a1ab5e15178bef458298b44818581.doc...
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## This note was uploaded on 05/22/2011 for the course ECO 2013 taught by Professor Denslow during the Spring '05 term at University of Florida.

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aq27Mar2 - 1,500 4 How much foreign finance is being used...

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