Oceana is the small country. Using the open-economy macro model, trace the effects of the following actions on savings and investment in Oceania and Oceania’s trade balance. Make sure you explain the transmission mechanism of these effects with graphs whe

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Oceana is the small country. Using the open-economy macro model, trace the effects of the following actions on savings and investment in Oceania and Oceania’s trade balance. Make sure you explain the transmission mechanism of these effects with graphs whenever possible. Oceana reduces the taxes Oceana reduces government spending. Oceana institutes an investment tax credit. A large number of foreign countries increase their government spending A large number of foreign countries institute an investment tax credit.

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