In a Large Open Economy,the Home Country's Saving and Investment

question 93

Essay

In a large open economy,the home country's saving and investment equations are:
S^d = 200 + 1400 r^w and I^d = 300 - 400 r^w.
The foreign country's saving and investment equations are:
S^d = 50 + 600r^w and I^d = 75 - 100 r^w.
Calculate the equilibrium world real interest rate,saving and investment in each country,and the current account balance in each country.

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Definitions:

Non-Competition Clause

A contract provision preventing an employee from entering into competition with their employer during or after their employment period.

Proprietary Interest

The ownership interest or rights in something, often associated with property or intellectual rights.

Just Cause

A legally sufficient reason for taking a particular action, especially for terminating an employee's contract without notice due to misconduct.

Sufficient Notice

Adequate information or warning given in advance to allow a person to prepare or respond to the information provided.