Introduction to Economics 2 Deneme Sınavı Sorusu #350021

If the government budget balance and international trade balance are achieved, what is the macroeconomic equilibrium condition in the economy?


Real interest rate = Nominal interest rate

 

Inflation rate = 0

 

GDP = GNP

 

National income = Disposable income

Savings = Investments


Yanıt Açıklaması:

If the government budget balance is achieved, then G = T. On the other hand, if the trade balance is achieved, then IM = EX. If you remember the equilibrium condition stating that leakages must equal injections as:

S + T + IM = I + G + EX

Considering G=T and IM=EX, the above equilibrium condition reduces to

S = I.

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