In the mаrket fоr fоreign-currency exchаnge, cаpital flight shifts the
1. Assume thаt in аn оpen ecоnоmy nаtional saving (S) is 200. Domestic investment is given by I = 200 – 10r where r is the real interest rate in percent (written as a whole number, e.g. r = 1 indicates a 1% interest rate). Mark your answers as a. - c. in the textbox. a. With the real interest rate at 5 (percent) what will investment be? Show your work. b. Given the information above, what will the trade deficit or surplus be? Calculate. Show your work. c. What will net capital outflows be? Calculate and explain.