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Marina86 [1]
4 years ago
11

(Advanced analysis) The following equations give information for a private open economy.

Business
1 answer:
loris [4]4 years ago
6 0

Answer: Trade Deficit ($10 Billion).

Explanation:

C=40+0.8Y

Ig=$40 billion

X=$20 billion

M=$30 billion

where,

Y - GDP

C - Consumption

Ig - Gross investment

X - Exports

M - Imports

Balance of trade or Trade balance = Exports - Imports

Since, Imports are greater than the exports, so the nation is experiencing a trade deficit.

Trade deficit = Imports - Exports

= $30 - $20

= $10 billion

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