As of Sept 4 th , one euro will be able to trade for 0.9951 USD. One-month forward exchange rate currently quote as 1 euro to trade for 0.99725 USD. Investors like to use one-month forward exchange rate as a forecast of future exchange rate. If the one-month forward exchange rate is spot on, that is, on the 4 th of Oct, 1 euro indeed does trade for 0.99725 USD. What can we say about the movement of US Net Export during this time? 4. Starting from the National Income Identity, show the followings: a. National Saving composed of Private Saving and Public Saving. b. In the closed economy, national saving equals to national investment. c. In the open economy, if country experiences trade deficit, national saving is smaller than investment. d. In the open economy, if country experiences trade surplus, then national saving is smaller than national output. e. Derive the Sectorial Balance Identity f. Use the Sectorial Balance Identity, show what would happen to I and NX if G increases. What is Twin Deficit, and is your result consistent with it?