Assume that the following equations characterize a large open
economy:
Y = 5,000
C = 1/2(Y – T)
I = 2,000 – 100r
NX = 500 – 500e
CF = –100r
CF = NX
G = 2,500
T = 1,000
where NX is net exports, CF is net capital outflow, and e is the
real exchange rate. Solve these equations for the equilibrium
values of C, I, NX, CF, r, and e.
Assume that the following equations characterize a large open economy: Y = 5,000 C = 1/2(Y – T) I = 2,000 – 100r NX
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