How large is the private saving-public and national saving

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Reference no: EM13693886

The national accounting of country M is reported as follows:

Y (GDP) = 100 (in billions)

C (consumption) = 80

I (domestic investment) = 20

G (government purchase) = 25

T (net taxes) = 10

FA (private capital flow) = +15 (credit)

a) How large is the private saving, public saving, and national saving, respectively?

b) How large is the net foreign investment? Is country M a lender or borrower?

c) If country M adopts a fixed exchange rate system, what kind of exchange pressure does its monetary authority face?

d) What’s the action needed by the monetary authority to keep the exchange rate at par?

Reference no: EM13693886

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