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Indonesia's GDP is $120 billion per year, and Indonesia's interest rate is constant at 5% Im year 1 Indonesia is hit by a tsunami
Indonesia's GDP is $120 billion per year, and Indonesia's interest rate is constant at 5% Im year 1 Indonesia is hit by a tsunami which causes its income from tourism to drop this year to only $57 billion. Income will recover back to $120 billion in all subsequent years. Assume Indonesian consumers aim to perfectly smooth consumption across all future years, and are able to borrow at an interest rate of 5% from foreigners. Year PV 1 3 (*=0.05) GDP 57 120 120 120 *.. Q9 Q10 TB Q11 NFIA Q12 FA 3 What will the path of Indonesian Trade Balance(TB) in the year of the tsunami and subsequent years. Complete the corresponding row(Q.10 TB) of the table. (a) 0, 0, 0, 0, .. (b) -20, 1, 1, 1, .. (c) -60, 3, 3, 3, .. (d) 67. -3.35. -3.35. -3.35, ..
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