Consider a small open economy with desired national saving of Sᵈ = 20 + 200 rʷ and desired investment of Iᵈ = 30 - 200 rʷ.Calculate national saving,investment,and the current account balance in equilibrium when the real world interest rate is
a.rʷ = 0.025
b.rʷ = 0.05
c.rʷ = 0.0
d.Now suppose something causes desired national saving to increase by 10,so that it is now Repeat parts a,b,and c.
e.Suppose,with desired national saving at its original level of Sᵈ = 20 + 200 rʷ,something causes desired investment to rise by 10,Iᵈ = 40 - 200 rʷ.Repeat parts a,b,and c.
Correct Answer:
Verified
b.S = 30,I = 20,C...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q66: Consider a small open economy in equilibrium
Q84: Consider an economy with GDP of $100
Q85: A large open economy has desired national
Q86: In a small open economy
Sᵈ = $20
Q88: Show where each of the following transactions
Q89: Explain why the current account balance and
Q90: The government of a small open economy
Q91: Briefly discuss the idea of "twin deficit."
Q92: Suppose the government of a large open
Q102: Due to a change in the regulatory
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents