In an open economy, the relationship between GDP ( Y) and expenditures is Y = C...

In an open economy, the relationship between GDP ( Y) and expenditures is Y = C + I + G.

Select one:

True

False

Solutions

Expert Solution

The statement is false

In an open economy, the Real output too includes Net exports. So the Y = Consumption + investment + Government spending + Net exports(Export - Imports)

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

In an open economy, GDP is $7400 billion, consumption is $4550 billion, government expenditures are $1200...

In an open economy, GDP is $7400 billion, consumption is $4550 billion, government expenditures are $1200 billion, investment is $2400 billion, and net export is -$750 billion. What are the national savings and NCO

Consider the Keynesian Model for the Open Economy with Government: Planned Expenditures: AE = C +...

Consider the Keynesian Model for the Open Economy with Government: Planned Expenditures: AE = C + I + G + X - IM Consumption: C = 435 + 0.72 (Y- T) Net Tax Revenue: T = 130 + 0.26 Y Gross Investment: I = 675 Government Expenditures: G = 540 Exports: X = 545 Imports: IM = 110 + 0.12 Y Potential Output: Yp = 3,550.742 Section 1: Model Questions Part 1. What is the slope of the AE curve? ...

The national income identity for an open economy economy is given as Y = C +...

The national income identity for an open economy economy is given as Y = C + I + G + EX − IMwhere Y is real GDP; C is consumption, I is investment, G is government expenditure, EX is exports and IM is imports. (a) List the types of types of purchases that are included in C (5 points) (b) What does I include? (3 points) (c) Explain why G is most likely much less than the actual government outlays...

1. GDP under the Expenditures Approach is defined as: Group of answer choices Y = C...

1. GDP under the Expenditures Approach is defined as: Group of answer choices Y = C + S + G + M – X GDP = C + Ig + G + XN 2. GDP under the Income Approach is defined as: Group of answer choices Y = Wages + Rents + Interest + Profits + Statistical Adjustments Y = National Income + Corporate Profits + Interest + Rents + Statistical Adjustments Y = Consumption + Savings + Income +...

Assume that GDP (Y ) is 5,000 in a closed economy. Consumption (C) is given by...

Assume that GDP (Y ) is 5,000 in a closed economy. Consumption (C) is given by the equation C = 1,200+0.3(Y −T)−50r, where r is the real interest rate, in percent. Investment (I) is given by the equation I = 1, 500 − 50r. Taxes (T ) are 1,000, and government spending (G) is 1,500. (a) What are the equilibrium values of C, I, and r? (b) What are the values of private saving, public saving, and national saving? (...

1. The relationship National Saving = Y – C – G holds for: A closed economy...

1. The relationship National Saving = Y – C – G holds for: A closed economy only An open economy only Either an open or closed economy 2. The relationship Saving = Investment holds for: A closed economy only An open economy only Either an open or closed economy 3. True or false: a trade deficit implies a positive net capital outflow. True False

In a small open economy which has a national income identity as the following. Y= C...

In a small open economy which has a national income identity as the following. Y= C + I + G + NX Where C = 400-1000r +0.75 (Y-T) I = 240-4000r G= 850 T= 300 + 0.1 Y, NX= 800-0.075 Y-120 e Where e= foreign currency/ domestic currency, and initially set at e = 1.25 + 10r The money demand function is Md = 840 + 0.4 Y-1000 r and Money supply is set by the Central Bank at 2540....

Consider a classical model of large-open economy described by the following equations: Y = C +...

Consider a classical model of large-open economy described by the following equations: Y = C + I + G + NX Y = 8,000 G = 2,500 T = 2,000 C = 500 + 2/3 (Y − T) I = 1,000 − 50r CF = 500 − 50r NX = 1,000 − 250ε where Y is output, C is consumption, I is investment, G is government purchases, NX is net exports, T is taxes, r is the real interest rate,...

A small open Economy is described by the following equations: C= 50 + 0.75(Y – T),...

A small open Economy is described by the following equations: C= 50 + 0.75(Y – T), I = 200-20r, NX = 200-e, M/P = Y-40r, G= 200, T = 200, M = 3,000, P = 3, and r* = 5 A. Drive the IS* and LM* equations B. Calculate the equilibrium Exchange Rate, level of income, and net exports C. Assume a floating exchange rate, calculate what happens to exchange rate , the level of income, net exports, and money...

GDP is typically calculated by tallying all final expenditures in an economy, but it can also...

GDP is typically calculated by tallying all final expenditures in an economy, but it can also be calculated by adding income. Pick a product and give an example of how that product's contribution to GDP could be calculated using income

Subjects