2) The country of Albanystan (country A) forms a small open economy on its own. It has savings SA = 30 + 300r and investment IA = 80 – 200r. a. If r = 0.2, is country A a borrower or a lender? b. Below what interest rate would country A be a borrower?

2) The country of Albanystan (country A) forms a small open economy on its own. It has savings SA = 30 + 300r and investment IA = 80 – 200r. a. If r = 0.2, is country A a borrower or a lender? b. Below what interest rate would country A be a borrower?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 1CQQ

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Question

2) The country of Albanystan (country A) forms a small open economy on its own. It has savings
SA = 30 + 300r and investment IA = 80 – 200r.
a. If r = 0.2, is country A a borrower or a lender?
b. Below what interest rate would country A be a borrower?

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