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Discuss the role of budget surpluses and trade surpluses in national saving and investment
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- In a country, private savings equals 600, the government budget surplus equals 200, and the trade surplus equals 100. What is the level of private investment in this economy?Briefly explain what a change in any part of the national saving and investment identity points out.Economics Consider the following data for country B, an open economy, for this year: Y = $14 trillion C = $6 trillion G = $2 trillion NX = $3 trillion T = $4 trillion TR = $0.5 trillion a) Find country B’s domestic investment. b) Find country B’s private saving. c) Find country B’s public saving. d) Find country A’s national saving. e) Find country B’s net foreign investment
- When there are two large open economies in the world, if capital goods become relatively cheaper compared to consumption goods in the foreign country, the foreign country's saving will and the foreign country's investment will fall; rise rise; fall rise; rise fall; fallExplain why, in a small open economy, national saving can be less than investment. Use a savings-investment graph to explainSuppose a country, Macroland, doesn't trade with other countries. Its GDP is $20 billion. Its government purchases $3 billion worth of goods and services each year, collects $3 billion in taxes, and provides $1 billion in transfer payments to households. Private saving in Macroland is $4 billion. What is investment in Macroland? Question 16 options: $1 billion $3 billion $2 billion $4 billion
- Briefly explain whether investment spending is likely to increase more rapidly in a country with a rapidly growing population or in a country with a slowly growing population. Does your answer depend on whether the country is a high-income industrial country or a low-income developing country?In an open economy, it is impossible to have national saving equal to domestic investment.Answer true, false, or uncertain. Please briefly explain your answer.Which of the following would be U.S. foreign direct investment? A. A U.S. canning factory opens a plant in Ecuador. B. A Bolivian bank buys U.S. corporate bonds. C. A Polish company opens a shipbuilding plant in the United States. D. A U.S. bank buys Bolivian corporate bonds.
- Which of the following statements does not belong to the main benefits of foreign direct investment (FDI)? FDI creates new jobs and boosts government tax revenues. FDI creates positive knowledge spillovers. FDI brings competition and improves efficiency. FDI makes local firms more difficult to survive and thus destroys local jobs.For an open economy, the equation Y = C + I + G + NX is an identity. If we define national saving, S, as the total income in the economy that is left after paying for consumption and government purchases, then for an open economy, it is true that a. S = I. b. S = / + NX. C./ = S + NX. d. S = 0.What is the relationship between national saving and investment in a closed economy? Start by explaining what is a closed economy.