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could you please solve me this question thank you! A tax reform in a small open economy increases the incentive for businesses to build new

could you please solve me this question thank you!

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A tax reform in a small open economy increases the incentive for businesses to build new factories. Use the model of the small open economy to predict what would happen to the trade balance, the real exchange rate, and the nominal exchange rate in response to it. You can refer to the following figure to facilitate your discussion. Real interest rate, r Trade surplus NX r* World interest rate Interest rate if the economy 1(r ) were closed Investment, Saving, I, S"Any policy aimed at lowering the natural rate of unemployment must either reduce the rate of job separation or increase the rate of job finding." Do you agree with this statement? Explain. You can refer to the following figure to facilitate your discussion. Job separation (s) Employed Unemployed Job finding (f)

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