Suppose that the government budget is balanced (G = T), and household saving is $1 trillion.
a. If this is a closed economy, what is the value of planned investment (I^p)?
b. If this is an open economy with balanced trade (IM = X), will investment have the same value as you found in (a)? Briefly, why or why not?
c. If this is an open economy with a trade deficit (IM > X), will planned investment have the same value as you found in (a)? Briefly, why or why not?