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Consider two open economies in which the real exchange rate is xed and equal to one. Consumption, investment, government spending, taxes, imports and exports are
Consider two open economies in which the real exchange rate is xed and equal to one. Consumption, investment, government spending, taxes, imports and exports are given by equations on the right for each economy. Variables with "*" denote values for the foreign economy. Solve for equilibrium output in the domestic economy Y, and foreign economy Y'. (Enter your answer as a whole number.) Y=:]A Y'=D_ Domestic economy; C=10+0.9(YT) I: 9 G = 'H' T = 10 M)! = 0.3Y EX = 0.3Y\" Flareign economy; 0* =10 + 0.9 (Y*- T") *= 9 (3*: 11 r'=1o M: 0.3% E '20.3Y
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