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In a small open economy, output (gross domestic product) is $30 billion, government purchases are $6 billion, and net factor payments from abroad are zero.

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In a small open economy, output (gross domestic product) is $30 billion, government purchases are $6 billion, and net factor payments from abroad are zero. Desired consumption and desired investment are related to the world real interest rate in the following manner: For each value of the world real interest rate, find the value for national saving and net exports. Caiculate net exports as the difference between output and absorption. What is the relationship between net exports and foreign lending? Net exports are foreign lending

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