Graphs and questions in images. Thank you! 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 currentlyexperiencing a balanced government budget.Real Interest Rate(Percent)765432National Saving(Billions of dollars)504540353025Domestic Investment(Billions of dollars)304050607080Net Capital Outflow(Billions of dollars)-20-15-10-505 REAL INTEREST RATENet Capital Outflow1086420-15 -10 -5 05 10NET CAPITAL OUTFLOW (Billions of dollars)1520NCO+Eqm. NCO(2.Because of the relationship between net capital outflow and net exports, the level of net capital outflow at the equilibrium real interest rate impliesthat the economy is experiencingNow, suppose the government is experiencing a budget deficit. This means thatloanable funds.which leads toAfter the budget deficit occurs, suppose the new equilibrium real interest rate is 7%. The following graph shows the demand curve in the foreign-currency exchange market.

The amount of money a nation makes and spends as a result of its exports and imports is known as net…

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 (Percent) 7 n 3 2 National Saving (Billions of dollars) 27 28 2 50 45 40 35 30 25 Domestic Investment (Billions of dollars) 30 40 50 60 70 80 Net Capital Outflow (Billions of dollars) -20 -15 -10 -5 u