Explain the relationship between private savings, investments, government savings, and net exports. Specifically, explain what private savings
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Explain the relationship between private savings, investments, government savings, and net exports. Specifically, explain what private savings identity suggests.
3. Go to the Fred Database (https://fred.stlouisfed.org) and download the annual data for the Net Exports and Government Deficit/Surplusboth as the ratio of GDP. Present the series in the scatter plot and explain the relationship between the two variables (please copy the graph from the excel and paste in word document). Explain whether the observed relationship corresponds with the predictions of the Private Savings Identity formula. Note: the time period for the series should be 1960-2021. The graph and the axis should be named. Also, include the trend line in the graph.
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