Macroeconomics: The Open Economy In The Short Run

The Open Economy  

An open economy is an economy in which there are economic activities between domestic community and outside, e.g. people, including businesses, can trade ingoods and services with other people and businesses in the international community, and flow of funds as investment across the border. Trade can be in the form of managerial exchange, technology transfers, all kinds of goods and services. Although, there are certain exceptions that cannot be exchanged, like, railway services of a country cannot be traded with another to avail this service, a country has to produce its own. This contrasts with a closed economy in which international trade and finance cannot take place. (Credit Thanx to wiki :) 

So, in the open economy of 'Good Market equilibrium' is equal to ---->  yD = y

Planned expenditure-closed Economy ------>  yD = c (y,t,r,wealth) + I (r, A) + g

Domestic Absorption @ Domestic Expenditure----> Abs = c + I + G

yD = (c+I+g) - m + x

     = Abs + (x - m) ----> net export
     = Abs + BT ----> [Planned expenditure - Open Economy]

*note that this note not finish yet. T_T. to be continued..Got something urgent to do. Daa..