1.Use the open economy macro model (the one with 3 diagrams) to illustrate what willhappen if the government ends a trade war. Make sure that you do the following:

(a)(1 point) Tell me which curve or curves move.

(b)(1 point) Tell me which direction the curve or curves move in.

(c)(1 point) Tell me what happens to Savings in equilibrium.

(d)(1 point) Tell me what happens to Investment Plus Net Capital Outflow in equi-

librium.

(e)(1 point) Tell me what happens to the Real Interest Rate in equilibrium.

(f)(1 point) Tell me what happens to Net Capital Outflow in equilibrium.

(g)(1 point) Tell me what happens to Net Exports in equilibrium.

(h)(1 point) Tell me what happens to the Real Exchange Rate in equilibrium.