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2. Suppose the country of Croatia, a small open economy can be described by the following equations: Y=C+I+G+NX Y = 12,500 G = 3,750 T

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2. Suppose the country of Croatia, a small open economy can be described by the following equations: Y=C+I+G+NX Y = 12,500 G = 3,750 T = 3,500 C = 1200 + 0.8(Y T) I = 1500 240r NX = 780 - 5008 r = r* = 4 (a) For this economy calculate (i) national savings (ii) level of investment (iii) net exports (iv) equilibrium exchange rate

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