9. Policy impacts on the real exchange rate Aa Aa Suppose that the government of a small open economy decides to enact an investment tax credit while increasing other taxes to keep tax revenue at its current level. On the following graph, the orange curve labeled S - I represents the difference between saving and investment, while the blue curve represents the trade balance. Show the impact that this policy will have on a small open economy by shifting the appropriate curve or curves. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just try again and drag it a little farther. REAL EXCHANGE RATE 24 S-I 20 18 16 14 10 NX 0 5 10 15 20 25 30 35 40 45 50 55 60 NET EXPORTS Billions of dollars)