A Large Open Economy Has Desired National Saving of S^d

question 65

Essay

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

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Definitions:

Current Assets

Resources anticipated to be turned into cash, sold, or used up within a timeframe of one year or during the usual business cycle if it extends beyond a year.

Office Supplies

Items used in offices for daily operations, including paper, pens, and staplers.

Cash

Liquid assets held by a company or an individual, used for the purpose of transactions or as a means to settle debts.

Intangible Assets

Intangible assets are non-physical assets owned by a company that have a useful life and provide future economic benefits, such as patents, trademarks, and goodwill.