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johnpaul92 johnpaul92
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8 years ago
Consider a small open economy with desired national saving of S to power of ((d)) = 20 + 200r to power of ((w)) and desired investment of I to power of ((d)) = 30 - 200 r to power of ((w)).
Calculate national saving, investment, and the current account balance in equilibrium when the real world interest rate is
(a)   r to power of ((w)) = 0.025.
(b)   r to power of ((w)) = 0.05.
(c)   r to power of ((w)) = 0.0.
(d)   Now suppose something causes desired national saving to increase by 10, so that it is now S to power of ((d)) = 30 + 200r to power of ((w)). Repeat parts (a), (b), and (c).
(e)   Suppose, with desired national saving at its original level of S to power of ((d)) = 20 + 200r to power of ((w)), something causes desired investment to rise by 10, to I to power of ((d)) = 40 - 200r to power of ((w)). Repeat parts (a), (b), and (c).
Textbook 
Macroeconomics

Macroeconomics


Edition: 8th
Authors:
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supamansupaman
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johnpaul92 Author
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8 years ago
Appreciate your help, thank you again
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