Calculate national saving

Assignment Help Microeconomics

Reference no: EM13880300

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 = ?

Reference no: EM13880300

Questions Cloud

Evaluate public health strategies for addressing emerging : Evaluate public health strategies for addressing emerging and reemerging infectious diseases, including the role of organizations and agencies

How would bp''s operating choice change : How would BP's operating choice change if, because of wishful thinking, it (wrongly) believed that its lenient safety policy implied only a 2 percent disaster risk? Or if it believed that its expected disaster cost would be $5 billion (instead of ..

The fed''s recent action and its upcoming decisions : In the last Fed's Open Market Committee meeting, Fed decided not to increase the interest rate. However, the expectation is that the Fed will increase the interest rate by the end of this year. Read at least three articles about this subject and pro..

What is the drag force on the sphere : Air at 25°C flows over a 10-mm-diameter sphere with a velocity of 25 m/s, while the surface of the sphere is maintained at 75°C (a) What is the drag force on the sphere?

Calculate national saving : 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 interes..

Explain sanctions against foreign persons as presented : Explain Sanctions against Foreign Persons as presented in Executive Order EO 12938?

What is m1 in this simple economy : 1) You earn $500 a month, currently have $200 in currency, $100 in your checking account, $2,000 in your savings accounts, $3,000 worth of illiquid assets and $1,000 of debt. a) How much money (M1) do you have?

Performance of health systems and population health status : How has that program evolved and influenced the entire U.S. health care system and what are some of the accomplishments and challenges for that program?

What is the firm''s expected profit : How many possible profit outcomes exist? Draw a decision tree listing these profit outcomes at the branch tips. Compute the firm's expected profit by folding back the tree. (It does not matter which uncertainty, demand or cost, is resolved first i..

User Account

All Pages