Compare and contrast a closed and small open economy under given scenario and draw diagrams if necessary.

1. Using the appropriate diagram, assess the impact that a permanent drop in business confidence has on a closed economy, assuming that it does not affect the income or saving behavior of the citizens. Make sure to label the diagram appropriately and to provide detailed explanation. 2. Can you suggest an example of a fiscal policy that can bring investment back to its original level? What would be the new level of interest rates in the economy after the fiscal policy is implemented? . Now repeat part (i) assuming that the country is a small open economy and a net foreign borrower. Describe the new equilibrium using the appropriate diagram. 1. Would the fiscal policy you suggested in part (ii) have the same impact as it had in the closed economy case? Provide an explanation/intuition for your answer and refer to the diagram as well