#1 Draw an investment savings diagram and an equilibrium world interest rate. Now assume that there is a global recession that leads to rms not wanting to invest. Show what happens to the world interest rate. Draw two other IS diagrams both where the country starts with CA = 0. One for a country who is not affected by the recession (whose investment line does NOT move) and one whose investment does decline. Explain what happens to the current account in each country using these gures