Assume in an economy as of 2019, given that total output (Y) is 1500, government purchase (G) is 500, consumption (C) is 400, lump-sum tax (T) is 80. Please write down the equation in the expression of abbreviations when deriving your result.

a. (2pts) If the economy is closed (no international trade), how much is investment (I)? b. (2pts) If the economy is closed (no international trade), how much is private saving

(!)?

c. (6pts) If the economy is closed (no international trade), how much is government

saving (")? Is it a budget deficit or surplus? How much is the national saving (S)?

Now assume that the economy is open to the rest of world, and investment (I) is 300. Answer the following:

1. (2pts) How much is current account (CA)?
2. (2pts) Based on your calculated current account in part (d), if exports (EX) is 450,
3. how much is imports (IM)?
4. (2pts) How much is private saving (!)?
5. (4pts) How much is the national saving (S)? How much is the saving rate (s)?
6. (2pts) Which of following is correct expression for an open economy?
7. A. = B. =+ C. =
8. D. =
9. (4pts) Now the president of this economy wants to improve current account to promote the economic performance, which of the following will be more likely to achieve this goal? Choose the best policy among the following and explain the intuition.
10. Import tariff
11. Domestic currency depreciation
12. Domestic currency appreciation