Use algebra to derive

Use algebra to derive

Use algebra to derive (i.e. show how one equation follows from the other), from national income account identities, the simple classical S=I model elaborated in Chapter 3 of Mishkin, using three assumptions: closed economy, small open economy, and large economy.  Use three graphs, one for each case, suitably labelled, to explain how the economy might react to a decrease in the autonomous demand for investment.   What will happen, in each case, to interest rates, GDP, I and S, and NX?