Re-Posted with screenshots to clarify

2. We assume that the world consists of two large open economies, home and foreign. Home Country Initial Conditions Cd = 500 + 0.4(Y-T) - 300rW I'd = 200 -300rw Y = 1500 T = 300 G =300 Foreign Country Initial Conditions CF = 340 + .4(YF - TF) - 200rW I'E = 100 -200rW YF = 1000 TF = 200 GF = 275 a) What is the equilibrium interest rate that clears the international goods market? Show all work. TW = 5b) Now calculate the levels of desired savings, investment, and net exports for each country at this equilibrium world real interest rate. Home: Foreign: SF = Ida= ! NXH= NXF=c) Which country is acting like the US (i.e., spending beyond its means) and which country is acting like China (i.e., the saver)? You must use and dene absorption to get full credit. d) Draw two diagrams side by side, with the Home country on the left and the Foreign country on right. Locate this initial equilibrium as points A on both diagrams (there are MAE, two on each diagram). Be sure to label diagram completely