Problem
1. What causes desired saving to increase? What effects will an increase in desired saving have in a closed economy?
2. What is crowding out?
3. Distinguish between a closed and an open economy. How do the conditions required for goods market equilibrium differ in the two types of economies?
4. What determines the world real interest rate? Why must the domestic real interest rate be the same as the world rate?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.