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.
(a) S = 1025, I = 987.5, CA =37.5.
(b) S = 1050, I = 975, CA = 75.
(c) S = 1000, I = 1000, CA = 0.
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