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Consider a small open economy with desired national saving of S = 20 + 200r* and desired investment of I = 30 - 200r*.
a. Calculate national saving(S), investment(I), and the current account balance(NX or CA) in equilibrium when the real world interest rate is : 
r* = 0.025, r* = 0.05 and r* = 0.0
(i) r* = 0.025: S = ? , I = ? , CA = ?
(ii) r* = 0.05: S = ? , I = ? , CA = ?
(iii) r* = 0.00: S = ? , I = ? , CA = ? 

Microeconomics, Economics

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