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3. The United States and China are two large open economies. If the Americans decided to save more at every real interest rate, what
3. The United States and China are two large open economies. If the Americans decided to save more at every real interest rate, what would happen to the national saving, Investment, the current account balance, and the real interest rate in China? Explain by using the graphs to illustrate. (2) If the Chinese decided to save more at every real interest rate, what would happen to the national saving. Investment, the current account balance, and the real interest rate in China? Explain by using the graphs to illustrate. (2) If the American government decided to increase its purchases of goods and services (with no changes in taxes and transfers), what would happen to the national saving, investment, the current account balance, and the real interest rate in China? Explain by using the graphs to illustrate. (2)
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