4. A country’s domestic supply of saving, domestic demand for saving for purposes of capital formation, and supply of net capital inflows are given by the following equations: LO 18.6 MEDIUM a)Assuming that the market for saving and investment is in equilibrium, find national saving, capital inflows, domestic investment and the real interest rate. b)Repeat part (a), assuming that desired national saving declines by 120 at each value of the real interest rate. What effect does a reduction in domestic saving have on capital inflows? c)Concern about the economy’s macroeconomic policies causes capital inflows to fall sharply so that now KI = −700 + 6000r. Repeat part (a). What does a reduction in capital inflows do to domestic investment and the real interest rate?