Assume that in a small open economy with full employment, consumption depends only on disposable income. National saving is 300, investment is given by I = 400 – 20r, where r is the real interest rate measured in percentage, and the world real interest rate is 10 percent.
Compute the investment, trade balance, and net capital outflow. (Note: be careful in doing the calculation especially regarding the real interest rate measurement. Recall that real interest rate has already measured in percentage).