Essay
In a large open economy,the home country's saving and investment equations are:
Sd = 200 + 1400 rw and Id = 300 - 400 rw.
The foreign country's saving and investment equations are:
Sd = 50 + 600rw and Id = 75 - 100 rw.
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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Worldwide savings equals 200 + 1400 rw + ...View Answer
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