Question 4 (20 points): Given the data on the US trade balance (known as net export) below: FRED - Trade Balance: Goods an 25, Balance of Payments Basis 20.000 Millions of Dollar 80 000 50,000 100,000 -120,000 1994 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Shaded areas indicate U.S. recession Sources: U.S. C au, U.S. Bureau of Eco mic Analysis fred stlouisted.org a. (5 points) During the pandemic, the US net export took a large dip (see arrow). How did this affect the trade deficit of the US? b. (10 points) Explain what might be causing this dip. You can read more about it here: https://research.stlouisfed.org/publications/economic-synopses/2020/09/16/the-dynamics- of-the-u-s-trade-deficit-during-covid-19-the-role-of-essential-medical-goods c. (5 points) When US net export decreases (as shown in the graph), explain how this would affect the interest rate via the market for loanable funds. Include a graph for the market for loanable funds for full credit. Hint: Recall that we have this equation: Net Export = Net Capital Outflow We also have this equation: Saving = Domestic Investment + Net Capital Outflow Demand of Supply of loanable funds loanable funds When Net Export decreases, what would happen to Net Capital Outflow? How would this affect the market for loanable fund