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Tom is stuck with his friends on an island that uses coconuts for currency, but they recently discovered Wilson's Island nearby. Tom's Island agrees to
- Tom is stuck with his friends on an island that uses coconuts for currency, but they recently discovered Wilson's Island nearby. Tom's Island agrees to make only one transaction with Wilson's Island. It sells a fishing boat to Wilson's for 18 coconuts. Answer the following questions assuming that yearly consumption on Tom's Island equals 400 coconuts, and domestic investments in huts and farm equipment equal 125 coconuts.
- Whatare the net exports for Tom's Island? Show your calculation steps.
b.What is the total national savings for Tom's Island? Show your calculation steps.
c. Suppose Tom's Island imports a volleyball net from Wilson's Island for 9 coconuts. What is the total national savings now?Show your calculation steps.
d. Now, Tom purchases 1 coconut tree on Wilson's Island at a cost of 9 coconuts. What is the net capital outflow?Show your calculation steps.
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