(3) (8 points) Your country, a small open economy, is running a trade surplus. Using the national income accounts identity for the open economy ( Y = C + I+ G +(X -M)) list four variables derived from this expression, other than X or M, so that the national economy can move this trade surplus (X - M greater than zero) to a deficit. Show, using the logic of this national income accounts identity, how you identified each of these four variables and what would have to happen to each. (4) (10 points) NOW take the national income accounts identity for the small open economy that has a trade balance in "deficit", NX less than 0. For a given level of income "Y", and "MPC", taxes "T", and investment spending "I", show how a large increase in government spending "G" can cause the trade "deficit" to increase even more. (no graphs, just use the information in the identity). From what you have determined, explain in no more than three sentences why a MARKET EXPECTATION ALONE of excessive government spending could lead to a rise in expected inflation in the economy and an actual change in both the real and nominal exchange rates. How would the real and nominal exchange rates for this economy's currency change