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Open & closed economies

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1. A open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. What is marginal propensity to save of this economy? *It looks as though enough information has not been provided.*

2. A open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. What is spending multiplier of this economy?

3. A open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. If a tourist comes to this economy and spends the $100 she brought from home, then what will happen to the equilibrium real GDP.

4. A open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. Assume that in an open economy the spending multiplier equals 5, given am MPI of 0.15 and an MPS of 0.05. What would be the spending multiplier in a closed economy.?

Please show how you arrived at the answer. Thank you

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1. Actually for this question you have more information than you need. The MPS is equal to 1-MPC. You don't need the MPI. In this case MPS =0.3

2. We can use this ...

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Unit 2 IP Macro

I need assistance with the below assignment. I am having difficulty defining the systems and your assistance would be greatly appreciated. I am little worried because I have a C-

In the textbook, there are two circular flow diagrams: One that represents the flows in the macro-economy as a closed system and one that represents the flows as an open system. Review the diagrams and write a three to five page length paper that:
Defines and explains a closed system and provides an example.
Defines and explains an open system and provides an example.
Explains the inner and outer flows of a closed system.
Explains the inner and outer flows of an open system.
Defines and explains leakages in an open system.
Defines and explains injections in an open system.
Provides a personal example of a leakage, describes it and explains it.
Provides a personal example of an injection, describes it and explains it.

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