A large open economy has desired national saving of S^d= 20 + 200 r^w and desired national investment of I^d = 30 - 200 r^w. The foreign economy has desired national saving of S^d = 40 + 100 r^w and desired national investment of I^d_For = 75 - 400 r^w.
a. Calculate the equilibrium values of r^w, CA, CA_For, S, I, S_For, and I_For.
b. Suppose S^d rises by 45, so that now S^d = 65 + 200 r^w. Calculate the equilibrium values of r^w CA, CA_For, S, I, S_For, and I_For.
c. Suppose with S^d back to S^d = 20 + 200 r^w as in part a, that I^d rises by 45, to I^d = 75 - 200 r^w. Calculate the equilibrium values of r^w, CA, CA_For, S, I, S_For and I_For.

Question

Quizplus · Accepted Answer

The Answer of A large open economy has desired national saving of S^d= 20 + 200 r^w and desired national investment of I^d = 30 - 200 r^w. The foreign economy has desired national saving of S^d = 40 + 100 r^w and desired national investment of I^d_For = 75 - 400 r^w. a. Calculate the equilibrium values of r^w, CA, CA_For, S, I, S_For, and I_For. b. Suppose S^d rises by 45, so that now S^d = 65 + 200 r^w. Calculate the equilibrium values of r^w CA, CA_For, S, I, S_For, and I_For. c. Suppose with S^d back to S^d = 20 + 200 r^w as in part a, that I^d rises by 45, to I^d = 75 - 200 r^w. Calculate the equilibrium values of r^w, CA, CA_For, S, I, S_For and I_For.

A Large Open Economy Has Desired National Saving of Sd

A Large Open Economy Has Desired National Saving of S^d