What is the equilibrium real exchange rate
Problem
In a small open economy, you are given that I(r) = 360 - 20r, NX(?) = 600 - 100? and that r = r* = 6% is the economy's real interest rate. National saving S=-100.
• What is the trade balance? • What is the equilibrium real exchange rate?
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In a small open economy, you are given that I(r) = 360 - 20r, NX(?) = 600 - 100?. What is the trade balance? What is the equilibrium real exchange rate?
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