A Large Open Economy Has Desired National Saving of Sᵈ

question 12

Essay

A large open economy has desired national saving of Sᵈ = 20 + 200 rʷ and desired national investment of Iᵈ = 30 - 200 rʷ.The foreign economy has desired national saving of Sᵈ = 40 + 100 rʷ and desired national investment of ᴵᵈ_For = 75 - 400 rʷ.
a.Calculate the equilibrium values of rʷ,CA,CA_For,S,I,S_For,and I_For.
b.Suppose Sᵈ rises by 45,so that now Sᵈ = 65 + 200 rʷ.Calculate the equilibrium values of rʷ CA,CA_For,S,I,S_For,and I_For.
c.Suppose with Sᵈ back to Sᵈ = 20 + 200 rʷ as in part a,that Iᵈ rises by 45,to Iᵈ = 75 - 200 rʷ.Calculate the equilibrium values of rʷ,CA,CA_For,S,I,S_For and I_For.

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Definitions:

Confounding Variable

An external influence that can affect the results of an experiment by varying along with the independent variable, potentially misleading the outcome.

Pretest-Posttest

A research design involving measurement before and after a specific intervention to assess its effects.

Sensitized

The process or state of becoming more aware or responsive to something, often used in the context of immune response or psychological conditioning.

Solomon Four-Group

An experimental design method that assesses the impact of pre-testing on the outcomes of an experiment through the use of four groups.