Consider a world with three equal-sized economies (A, B, and C) and three goods (clothes,cars,andcomputers).Assumethat consumersinallthreeeconomies want to spend an equal amount on all three goods.The value of production of each good in the three economies is given in the table below.

ABCC

Clothes1005

Cars5100

Computers0510

a)

What is GDP in each economy? If the total value of GDP is consumed and no country borrowsfromabroad,how muchwillconsumersineacheconomy spend on each of

the goods?

b)Ifnocountryborrowsfromabroad,whatwillbethetrade balanceineach

country? What will be the pattern of trade in this world (i.e., which good will each

country export and to whom)?