In an open economy, the domestic investment (I) is financed by private saving (SP), pubic saving (SG) and borrowing from foreign economies (M X).

(a) How does a trade deficit (X M < 0) in the current fiscal year affect the domestic investment if the national saving remains unchanged?

(b) How does a budget deficit (T G < 0) in the current fiscal year affect the domestic investment if all the other things being constant.