Business, 30.11.2019 01:31 trippie4life

Consider two large open economies: home and foreign. the home country's saving and investment equations are: sd = 200+1400 rw and id = 300-400 rw. the foreign country's saving and investment equations are: sd = 50+600rw and id = 75-100rw. calculate the equilibrium world real interest rate. enter your answer in percentage terms and without the % sign (for instance, for 8% enter 8). hint: sum up both saving equations to obtain global saving, and then sum up both investment equations to obtain global investment. recall the the world interest rate is the one that equates global saving to global investment, which is the same as the sum of the current account of home and foreign to add up to zero.

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Consider two large open economies: home and foreign. the home country's saving and investment equat...

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