Does the trade balance change if G rises by 100?

Assume that in a small open economy with full employment consumption deoends only on disposable inc Show more Assume that in a small open economy with full employment consumption deoends only on disposable income. National saving is 300 investment is given by I=400-20r where r is real interest rate in percent and the world interest rate in 10 percent. a) If government spendind rise by 100 does investment changes? What is tge level of investment after the rise in government spending? b) Does the trade balance change if G rises by 100? If it changes does it increase or decrease and by how much? c) Does net capital outflow changes f G rises by 100? If it changes does it increase or decrease and by how much? d) Wi the real exchange rate risefall or remain constant as a result of the change in G? Show less

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