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Consider a small open economy with desired national saving of Sd = 1000 + 1000rw and...

Consider a small open economy with desired national saving of Sd = 1000 + 1000rw and desired investment of Id = 1000 - 500rw.

Calculate national saving, investment, and the current account balance in equilibrium when the real world interest rate is

(a) rw = 0.025. (b) rw=0.05. (c) rw = 0.0.

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