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4. Recently, there has been a spate of instability throughout the world. The pandemic and also political instability in some regions. a. Explain intuitively why

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4. Recently, there has been a spate of instability throughout the world. The pandemic and also political instability in some regions. a. Explain intuitively why the NCO curve slopes downward. Begin your explanation, by considering a decrease in the real interest rate. b. Using the three panel diagram for the US, explain the effects ofthe political instability on the US economy. Determine what happens to the following: the real interest rate, national savings, investment, NCO, E, exports, imports, and net exports. [Note: lfyou cannot unambiguously determine what happens to any of the variables listed, clearly state that the effect is ambiguous, and discuss under what conditions the variable increases or decreases]

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