Triniland is recognized as a high-income economy by the World Bank. Assume that    households in Triniland decide to increase their savings for retirement.              Using a correctly labelled diagram of the loanable funds market, show how the increase in savings will affect the equilibrium real interest rate. Based on the real interest rate change identified in part (a), what will happen to Triniland’s purchases of foreign assets? Explain. Consider the foreign exchange market for Triniland’s currency.

Consider a hypothetical open economy. The following table presents data on the relationship between various real interest rates and national saving, domestic investment, and net capital outflow in this economy, where the currency is the U.S. dollar. Assume that the economy is currently experiencing a balanced government budget.   Real Interest Rate National Saving Domestic Investment Net Capital Outflow (Percent) (Billions of dollars) (Billions of dollars) (Billions of dollars) 7 60 25 -10 6 55 30 -5 5 50 35 0 4 45 40 5 3 40 45 10 2 35 50 15     Given the information in the preceding table, use the blue points (circle symbol) to plot the demand for loanable funds. Next, use the orange points (square symbol) to plot the supply of loanable funds. Finally, use the black point (cross symbol) to indicate the equilibrium in this market.       On the following graph, plot the relationship between the real…

When the U.S. real interest rate rises  _______ . Group of answer choices U.S. dollar assets earn a higher return relative to foreign assets imports will decrease makes U.S. exports cheaper in foreign currencies makes imports more expensive in U.S. dollars

Suppose that the government decides to cut spending. In a three graphs diagram, show theimpact of this policy on real interest rate, national saving, investment, net capital outflows,demand for currency (NX), and supply of currency? Will the currency appreciate ordepreciate?