Question

 

Its total output (income) is $4900. Domestic consumption is $2300; total domestic government purchases are $600; and domestic economic investment totals $1700. The nation exports $400 and imports $100.

1) Find this nation's national savings.

2) Consider again the economy from the previous question.  

This economy runs a trade _______ and is a net ___________ other nations.

a. deficit; lender to

b. surplus; borrower from

c. surplus; lender to

d. deficit; borrower from

Answer 1

we are given

Y=4900

C=2300

G=600

I=1700

Nert export (X-M)=300

we know

Y=C+S

S=Y-C

S=4900-2300

s=2600

2. This economy runs a trade surplus and is a net lenderto other nations.

the economy has export greater than import by 300