5. How would each of the following affect national sav ing, investment, the current account balance, and the real interest rate in a large open economy?

a. An increase in the domestic willingness to save

(which raises desired national saving at any given real interest rate).

b. An increase in the willingness of foreigners to save.

c. A temporary increase in foreign government purchases.

d. An increase in foreign taxes (consider both the case in which Ricardian equivalence holds and the case in which it doesn’t hold).