In the open-economy macroeconomic model, at the equilibrium real interest rate, the amount that people (including government) want to save equals desired quantities of domestic investment and net capital outflow.

Question

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In the open-economy macroeconomic model, equilibrium is achieved at the real interest rate where the amount people (including the government) want to save exactly equals the sum of the desired quantities of domestic investment and net capital outflow. This balance ensures that the supply of loanable funds meets the demand for those funds both for domestic investment and for investment abroad.

In the Open-Economy Macroeconomic Model, at the Equilibrium Real Interest