Use the model from chapter 5 of the textbook to predict how each of the followin

Question

Use the model from chapter 5 of the textbook to predict how each of the following
shocks would affect national saving (S), investment (I), the trade balance (NX), and the
real exchange rate (?) in a small, open economy with perfect capital mobility, all else
equal. For each shock, be sure to clearly state a prediction for all four variables, illustrate
your predictions with the relevant diagrams, and explain your predictions intuitively in
words.
a. Technological progress increases domestic total factor productivity.
b. The world

Explanation / Answer

Hi, I still need the model in order to answer your question. Let me know.

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