CHAPTER 18

6. (2 points) For partial credit, show your work. In a country, private savings equals 800, the government budget surplus equals 49, and the trade surplus equals 79. What is the level of private investment (I) in this economy?

7. (2 points) For partial credit, show your work. In a country, private investment equals 745, the government budget deficit equals 250 (in other words, public savings equals -250), and the trade surplus equals 220. What is the level of private savings (S) in this economy?

8. (2 points) For partial credit, show your work. Suppose that it is the year 1999 and the U.S. government has a budget surplus, although the U.S. economy is still experiencing a trade deficit. Private savings equals 419, the government surplus equals 299, and private investment equals 920. What is the level of the trade deficit (M-X) in this economy?

9. (3 points) For partial credit, show your work. (Hint: Chapter 18 self-check question #2Links to an external site. is very similar to this problem) Assume an economy has a budget surplus of 1,900, private savings of 2,400, and investment of 3,400.

a. Write out a national saving and investment identity for this economy. b. What will be the balance of trade in this economy? c. If the budget surplus changes to a budget deficit of 1,900, with private saving and investment unchanged, what is the new balance of trade in this economy?