9.* An economy has zero net exports. Otherwise, it is identical to the economy described in Problem...

Question:

9.* An economy has zero net exports. Otherwise, it is identical to the economy described in Problem 7. (LO3, LO4, LO5) a. Find short-run equilibrium output. b. Economic recovery abroad increases the demand for the country’s exports; as a result, NX rises to 100. What happens to short-run equilibrium output? c. Repeat part b, but this time assume that foreign economies are slowing, reducing the demand for the country’s exports, so that NX = −100. (A negative value of net exports means that exports are less than imports.) d. How do your results help explain the tendency of recessions and expansions to spread across countries?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Principles Of Macroeconomics

ISBN: 9781264250356

8th Edition

Authors: Robert Frank, Ben Bernanke, Kate Antonovics, Ori Heffetz

Question Posted: