Question $13(1$ point$)$

The country of Granville engages with the rest of the world in trade. It is a small open economy. The market for loanable funds in Granville is given by the functions $I=200-5r$ and $S=75+75r,$ where I is investment $($in dollars$),S$ is savings $($in dollars$)$ and $r$ is real interest rate $($in whole number values, not decimal form$).$

The world interest rate is $2\%.$ That is$,r=2.$

Net exports are given by $Nx=50-2x,$ where $x$ is the exchange rate, measured as a whole number value $($not a decimal$).$

What is the exchange rate in Granville?

$-7\mathrm{.}5\%$

$7\mathrm{.}5\%$

Some other value

$25\%$

$-25\%$