Business, 16.11.2019 02:31 princessmnicole2

Consider an economy described by the following equations:

y = c + i + g + nx,

y = 5,000,

g = 1,000,

t = 1,000,

c = 250 + 0.75(y – t),

i = 1,000 – 50r,

nx = 500 – 500e,

r = r* = 5.

a. in this economy, solve for national saving, investment, the trade balance, and the equilibrium exchange rate.

b. suppose now that g rises to 1,250. solve for national saving, investment, the trade balance, and the equilibrium exchange rate. explain what you find.

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Consider an economy described by the following equations:

y = c + i + g + nx,

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