The data in columns 1 and 2 in the table below are for a private closed economy. LO4

a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy.

b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4.

Fill in columns 5 and 6 and determine the equilibrium GDP for the open economy. What is the change in equilibrium GDP caused by the addition of net exports?

c. Given the original $20 billion level of exports, what would be net exports and the equilibrium GDP if imports were $10 billion greater at each level of GDP?

d. What is the multiplier in this example?

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(1) Real Domestic Output (GDP-DI), Billions (2) Aggregate Expenditures, Private Closed Economy, Billions (5) (3) Exports, Billions (4) Imports, Billions Net Exports, Billions $200 $240 $20 $30 250 280 20 30 300 320 350 360 400 400 450 500 440 480 550 520 222222 20 30 20 30 20 30 20 30 20 30 20 30 (6) Aggregate Expenditures, Private Open Economy, Billions