Current level of net exports of goods and services

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Reference no: EM131244220

Consider the following information for a different country: East Caledonia

GDP = 1110; Absorption = 1400; Current Account (CA) = +210

A. Is East Caledonia currently

1. In a position of External Balance? (YES/NO/NEED MORE INFORMATION)

2. In a position of Internal Balance? (YES/NO/NEED MORE INFORMATION)

3. A Saver or a Dis-saver, as an economic unit, in the world economy?

B. Calculate East Caledonia’s current level of Net Unilateral Transfers (net UT). Show all your calculations to obtain full credit.

C. Calculate East Caledonia’s current level of Net Exports of goods & services (X - M). Show all your calculations to obtain full credit.

D. Suppose that East Caledonia’s GDP falls to 1050, with Net UT remaining equal to the value you calculated in Part B above. What will be the level of Absorption that moves East Caledonia into a position of External Balance? Show your calculations to obtain full credit.

Reference no: EM131244220

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