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b. (4 pts) Now consider the EU's relationship to the rest of the world. The EU is presently running a current account surplus, CA >

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b. (4 pts) Now consider the EU's relationship to the rest of the world. The EU is presently running a current account surplus, CA > 0. Suppose we view the USA as a stand-in for the rest of the world. Mark the curves below to indicate the SEU, JEU, SUSA, JUSA, SWorld, [ World CAEU, CAUSA, KFA EU, KFAUSA, and r. EU USA World rW c. (4 pts) On the graph below show the consequences (bigger, smaller) of a large investment contraction on r", the EUs's CA, KFA, and the USA's CA, KFA. EU USA World rw

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