Consider a small open economy with desired national saving of Sd = 20 + 200rw and desired investment of Id = 30 - 200rw.
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 Sd = 30 + 200 .Repeat parts (a),(b),and (c).
(e)Suppose,with desired national saving at its original level of Sd = 20 + 200rw,something causes desired investment to rise by 10,to Id = 40 - 200rw.Repeat parts (a),(b),and (c).

Question

Consider a small open economy with desired national saving of Sd = 20 + 200rw and desired investment of Id = 30 - 200rw.
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 Sd = 30 + 200  .Repeat parts (a),(b),and (c).
(e)Suppose,with desired national saving at its original level of Sd = 20 + 200rw,something causes desired investment to rise by 10,to Id = 40 - 200rw.Repeat parts (a),(b),and (c).

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The Answer of Consider a small open economy with desired national saving of Sd = 20 + 200rw and desired investment of Id = 30 - 200rw.
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 Sd = 30 + 200  .Repeat parts (a),(b),and (c).
(e)Suppose,with desired national saving at its original level of Sd = 20 + 200rw,something causes desired investment to rise by 10,to Id = 40 - 200rw.Repeat parts (a),(b),and (c).

Consider a Small Open Economy with Desired National Saving of Sd