14. Figure 13.4 shows the effect of an increase in the world interest rate on a small open economy with perfect capital mobility. In the figure, we assumed that net capital outflow (NCO) was positive. For most of the past 40 years, however, Canada's NCO has been negative. Redraw the two panels of Figure 13.4, but this time assume that NCO is negative at the world interest rate. Now suppose that the world interest rate increases. What happens to national saving (S)? What happens to domestic investment (/)? What happens to NCO and the real exchange rate? Does the conclusion we reached in our discussion of Figure 13.4—that an increase in world interest rates causes the Canadian dollar to depreciate and net exports to increase—still hold?