1. All else being equal, an increase in income in Greenland leads to:

(a) An increase in consumption in Antarctica, and therefore an increase in imports, resulting in an appreciation of the AAD.

(b) A decrease in consumption in Antarctica, and therefore an increase in exports, resulting in a depreciation of the AAD.

(c) An increase in consumption in Greenland, and therefore an increase in imports, resulting in an appreciation of the AAD.

(d) An increase in consumption in Greenland, and therefore an increase in imports, resulting in a depreciation of the AAD.

2. All else being equal, a decrease in the interest rate r∗ in Greenland leads to:

(a) Decreased demand for assets in Greenland, and therefore a depreciation of the GRK.

(b) Decreased demand for assets in Greenland, and therefore a depreciation of the AAD.

(c) An increase in consumption in Greenland, and therefore an increase in imports, resulting in an appreciation of the GRK.

(d) An increase in consumption in Antarctica, and therefore an increase in exports, resulting in a depreciation of the AAD.

3. All else being equal, a decrease in prices in Greenland leads to:

(a) An increase in exports to Antarctica, and therefore an appreciation of the AAD.

(b) An increase in exports to Antarctica, and therefore a depreciation of the AAD.

(c) An increase in consumption in Greenland, and therefore an increase in imports, resulting in an appreciation of the AAD.

(d) A decrease in consumption in Greenland, and therefore a decrease in imports, resulting in a depreciation of the AAD.