1, suppose that your government introduces an investment tax credit, which subsidizes domestic investment. how does this policy affect national saving, domestic investment, net capital outflow, the interest rate, the exchange rate, and the trade balance?

2, suppose that your countrymen decide to increase their saving.

A, if the elasticity of net capital outflow with respect to the real interest rate is very important rate is very high, will this increase in private saving have a large or small effect on domestic investment?

B, if the elasticity of exports with respect to the real exchange rate is very low, will this increase in private saving have a larger have a large or small effect on your real exchange rate?