Suppose in a small open economy, real GDP is $500 billion, consumption is $300 billion, investment is $120 billion, government purchases equal $100 billion, exports are $80 billion, and imports are $100 billion. (a) Does this country run a trade surplus or a trade deficit? Does this imply there is a capital outflow or inflow? How do you know it?

Suppose in a small open economy, real GDP is $500 billion, consumption is $300 billion, investment is $120 billion, government purchases equal $100 billion, exports are $80 billion, and imports are $100 billion. (a) Does this country run a trade surplus or a trade deficit? Does this imply there is a capital outflow or inflow? How do you know it?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter4: The Aggregate Economy

Section: Chapter Questions

Problem 5E

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