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Planet Economics consists of three countries only; they are A, B and C.  Table 1 provides some macroeconomic data for these countries.

Table 1

A

B

C

Gross domestic product, GDP

6225

Consumption, C

4262.5

5915

Investment, I

1162.5

Government spending, G

1380

Taxes, T

1352

Exports of goods and services, EX

Imports of goods and services, IM

Private saving, SP

Public saving, SGC

0

National saving, S

Net unilateral transfer

0

0

0

Current account, CA

Sales of country’s financial assets to foreign residents

3190

Purchases of foreign financial assets by domestic residents

3115

Official reserve transactions, ORT

– 390

Financial account, KA

– 550

Capital account

Note:  Empty cell only means the data is not given in the question, it does not mean the variable takes a value of zero. 

Country-specific information:

Country A:

• The households consume 55% of the country’s output.
• A has twin deficits and the size of (each) deficit is 10% of the country’s output.
• The sales of A’s products to B are worth 1550, while the purchases of B’s products by A are worth 3280.
• The value of financial assets sold to C’s residents is equal to 1945.

Country B:

• Private consumption represents 60% of GDP.
• The government of B runs a balanced budget.
• The central bank of B does not buy or sell any of its official reserves.
• The amount of financial assets purchased by the residents of B from the residents of A reaches 1810, while the amount of financial assets purchased from the residents of C is 1853.

Country C:

• Public savings and private savings are equal to 169 and 1183 respectively.
• C sells 1370 worth of final products to A.
• The level of C’s products purchased by B is 1165.
• Residents of C receive (net) asset transfers of 255 and 225 from residents of A and B respectively. No market transactions are involved in these transfers. 

Other information:

• The central banks of all three countries do not make any transaction with the private sector. In other words, the central banks only make transactions with other countries’ monetary authorities.

Complete the above table.  You are not required to provide explanation to your answer for this question; however, you should understand the logic behind the entry of each cell so that you can work on similar questions in the future.

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