Consider a world with only two countries, which are designated the home country (H) and the foreign country (F). You are given the following information about each country: (Saving and investment are in $10 billion and is in %) Home Country Saving: SH = 2.5 +0.5 Investment: H = 8.0 - 1.0 Foreign Country Sp=1.0+ 1.0 F=6.5-0.5 a. What is the equilibrium value of the world real interest rate and the current account balance in each country? = CA. CA-

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Chapter25: Production And Growth
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Consider a world with only two countries, which are designated the home country (H) and the foreign country (F). You are given the following information about each country: (Saving and investment are
in $10 billion and is in %)
Home Country
Saving:
Investment:
SH = 2.5 +0.5
H=8.0
1.0"
Foreign Country
SF = 1.0 + 1.0
F= 6.5 -0.5
a. What is the equilibrium value of the world real interest rate and the current account balance in each country?
=%, CA. CAF = ☐
Transcribed Image Text:K Consider a world with only two countries, which are designated the home country (H) and the foreign country (F). You are given the following information about each country: (Saving and investment are in $10 billion and is in %) Home Country Saving: Investment: SH = 2.5 +0.5 H=8.0 1.0" Foreign Country SF = 1.0 + 1.0 F= 6.5 -0.5 a. What is the equilibrium value of the world real interest rate and the current account balance in each country? =%, CA. CAF = ☐
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