Part 3: Analical or Essay Questions {3-1} Balance of Payments and Net Foreign Asset Position [16'] The home country has zero net foreign asset position at the beginning of Year 1 (or equivalently, at the end of Year 0], Le, it does not owe any debt to foreign countries, nor does it have any loans to foreigners. a] In Year 1, domestic saving is 100, and domestic investment is 200. What is the current account this year? Does the home country run a current account surplus or deficit? (2') b] Suppose the interest rate on international borrowing is 5%. What is home country's net foreign asset position at the end of Year 1? {2'} c] In Year 2, domestic saving is 200, and domestic investment is 100. What is the current account in Year 2'? What is home country's net foreign asset position at the end of Year 2? [2'] d] After a few years, Home's net foreign asset position is 400. For simplicity, assume GDP is 100!) every year afterward, and the interest rate on international borrowing is kept at zero from now on. Suppose Home wants to maintain a current account surplus at 2% of GDP and gradually pay back the debt. How