Question: Info needed to answer question. Prior to change - r w = .05 Home Country S d = 255 I d = 210 NX= 45
Info needed to answer question.
Prior to change -
rw= .05
Home Country
Sd= 255
Id= 210
NX= 45
Foreign Country
Sd= 95
Id= 140
NX=-45
G rises by 50 to 325.
After change -
rw= .1
Home Country
Sd= 270
Id= 195
NX= 75
F Country
Sd= 55
Id= 130
NX= -75
QUESTION: What happened to the trade balance for the foreign country and did the increase in G ' crowd out' private investment? If so, how much private investment was crowded out? Show work and explain...
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