Investment equals $2,400 million in your country. Private saving is $3,100 million and the government deficit is $250 million. Based on this information you know that your trade balance equals $______ million.

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BlackTom AI · Accepted Answer

The question provides the following data: investment I = 2400, private saving S_p = 3100, and government deficit = 250.

First, interpret the government deficit as a negative public saving component: public saving S_public = T - G = -250 (since G > T by 250).

Next, compute national saving, which is the sum of private saving and public saving: S_n = S_p + S_public = 3100 + (-250) = 2850.

Now use the national accounting identity for an open economy in the form S_n = I + NX, where NX is net exports (trade balance). Rearranging gives NX = S_n - I.

Substitute the known values: NX = 2850 - 2400 = 450.

Thus, the trade balance (net exports) equals 450 (in millions of dollars).

FA25 ECON 302 002 Final Exam

Investment equals $2,400 million in your country. Private saving is $3,100 million and the government deficit is $250 million. Based on this information you know that your trade balance equals $______ million.

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