By opening up to foreign markets, two things that countries generally experience are:
A. gaining access to a wide array of new products and saving money through access to cheaper goods.
B. saving money through access to cheaper goods and finding new customers who generally pay less for their products.
C. increase in negative trade outcomes with that nation and finding customers who generally pay less for their products.
D. gaining access to a wide array of new products and increase in negative trade outcomes with that nation.
Answer: A
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Define the marginal propensity to import
What will be an ideal response?
Suppose output is $35 billion, government purchases are $10 billion, consumption is $15 billion, and net exports are $4 billion. Assume net factor payments equal 0
(a) Calculate the equilibrium amount of investment. Show your work. (b) Calculate the equilibrium amount of absorption. Show your work. (c) Calculate the equilibrium amount of the financial account balance. Show your work.