6. In a small open economy, desired national saving, S d = $10 billion + ($100...

6. In a small open economy, desired national saving, S ^d = $10 billion + ($100 billion)r^w ; desired investment, I^d =$15 billion-($100 billion)r^w ; output, Y= $50 billion; government purchases, G = $10billion; world real interest rate, r^w =0.03

a. Find the economy’s national saving, investment, current account surplus, net exports, desire consumption, and adsorption.

b. Owing to a technological innovation that increases future productivity, the country’s desired investment rises by $2 billon at each level of the world real interest rate. Repeat part (a) with this new information

Expert Solution

Rahul Sunny answered 2 years ago

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