Econ110BW11 - Lec15 A - GR_ol

Econ110BW11 - Lec15 A - GR_ol - Macroeconomics B Econ...

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Macroeconomics B Econ 110B, Winter 2011 Prof. Giacomo Rondina Lecture 15
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The Open Economy ± Trade is in goods, services and capital (financial assets). ± Outcome of economic policies depend on international trade. ± Trade Balance and Intertemporal Borrowing and Lending ± Balance of Payments (Current Account and Capital Account) ± GDP and GNP 2 Openness in Goods and Financial Markets (Ch. 18)
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Open Economy: Difference Between GDP and GNP NP: ross National Product GNP: Gross National Product Value added by domestically owned factors of production (ownership of factors matters) GDP: Gross Domestic Product Value added domestically (location of factors matters) GDP + IR – IP = GNP ctor payments ctor payments Factor payments received from the rest of the world Factor payments paid to the rest of the world 3 Openness in Goods and Financial Markets (Ch. 18)
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Open Economy: Difference Between GDP and GNP NP: ross National Product GNP: Gross National Product Value added by domestically owned factors of production (ownership of factors matters) GDP: Gross Domestic Product Value added domestically (location of factors matters) GDP + IR – IP = GNP Rest of the World (W) Owner Location Factors of Production: K A AA Inside A Inside A A KY K Y WW Inside A Inside A W K Y Outside AO utside A Outside utside A A Inside A Outside A GNP Therefore: YY →+ A Outside A IR notice: Y = 4 Openness in Goods and Financial Markets (Ch. 18) AW A Inside A Inside A GDP W Inside A IP Y =
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Open Economy: Difference Between GDP and GNP NP: ross National Product GNP: Gross National Product Value added by domestically owned factors of production (ownership of factors matters) GDP:
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This note was uploaded on 01/18/2012 for the course ECON 101 taught by Professor Bansak during the Summer '07 term at San Diego State.

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Econ110BW11 - Lec15 A - GR_ol - Macroeconomics B Econ...

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