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Assume the economy is open to capital inflows and outflows and therefore net capital inflow
equals imports(IM) minus exports(X). Using the Savings-Investment Open economy identity and
given the following data calculate each of the following: a. X=$75 million, IM=$90 million, Budget
Balance =$110 million, Investment =$190 million. Calculate private savings. b. X=$300 million, IM
=$185 million, Private Savings =$260 million, Investment =$245 million. Calculate the Budget
Balance.

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Assume the economy is open to capital inflows and outflows a.pdf

  • 1. Assume the economy is open to capital inflows and outflows and therefore net capital inflow equals imports(IM) minus exports(X). Using the Savings-Investment Open economy identity and given the following data calculate each of the following: a. X=$75 million, IM=$90 million, Budget Balance =$110 million, Investment =$190 million. Calculate private savings. b. X=$300 million, IM =$185 million, Private Savings =$260 million, Investment =$245 million. Calculate the Budget Balance.