Problems and Applications Q9 Suppose that Americans decide to increase their saving. As a result, the real interest rate will ?.______and U.S. net capital outflow will_____
a) If the elasticity of us. net capital outflow with respect to the real interest rate is very low, this increase in private saving will have a____on U.S. domestic investment. ?
b) If the elasticity of U.S. exports with respect to the real exchange rate is very high, this increase in private saving will have a____ effect on the U.S. real exchange rate