{"id":5459,"date":"2019-02-14T10:29:54","date_gmt":"2019-02-14T04:59:54","guid":{"rendered":"http:\/\/astan.lk\/al_virtualclassroom\/?p=5459"},"modified":"2019-02-16T10:35:15","modified_gmt":"2019-02-16T05:05:15","slug":"open-economy","status":"publish","type":"post","link":"https:\/\/astan.lk\/al_virtualclassroom\/open-economy\/","title":{"rendered":"Open economy"},"content":{"rendered":"

When a closed economy is open to the foreign sector, it is called an open economy.<\/p>\n

\nThe components that are used to compute the equilibrium in an open economy are as follows<\/strong>.<\/span><\/h3>\n
    \n
  • Consumption (C)<\/li>\n
  • \u00a0Savings (S)<\/li>\n
  • Investment (I)<\/li>\n
  • Government purchases (G)<\/li>\n
  • Transfers (Tr)<\/li>\n
  • Autonomous taxes (T)<\/li>\n
  • Imports (M)<\/li>\n
  • Exports (X)<\/li>\n<\/ul>\n

    \nEquilibrium in an open economy can be explained through two approaches.<\/strong><\/span><\/h3>\n
      \n
    • Income and expenditure approach<\/li>\n
    • Withdrawals and Injections approach<\/li>\n<\/ul>\n

       <\/p>\n

        \n
      • According to the income and expenditure method, equilibrium in open economy can be calculated as follows. Y = C+I+G+ (X-M)<\/li>\n
      • Equilibrium in an open economy also can be calculated using the withdrawals and Injections method.
        \nWithdrawals= S+T+M
        \nInjections = I+G+X
        \nW = J
        \nS+T+M = I+G+X<\/li>\n
      • Savings (S), autonomous taxes (T) and Imports (M) are considered as withdrawals.<\/li>\n
      • Investment (I) Government purchases (G) and Exports ( X) are considered as
        \ninjections.<\/li>\n
      • Equilibrium in an open economy can be presented with a statistical table and
        \ngraphically.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

        When a closed economy is open to the foreign sector, it is called an open economy. The components that are used to compute the equilibrium in an open economy are as follows. Consumption (C) \u00a0Savings (S) Investment (I) Government purchases (G) Transfers (Tr) Autonomous taxes (T) Imports (M) Exports (X) Equilibrium in an open economy […]<\/p>\n","protected":false},"author":842,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[54,2687],"tags":[],"class_list":["post-5459","post","type-post","status-publish","format-standard","hentry","category-economics","category-unit-5-en"],"acf":[],"yoast_head":"\nOpen economy - Learning & Education Portal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/astan.lk\/al_virtualclassroom\/open-economy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Open economy - Learning & Education Portal\" \/>\n<meta property=\"og:description\" content=\"When a closed economy is open to the foreign sector, it is called an open economy. 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