3. Suppose that Canada imposes restrictions on the importation of steel into Canada. According to the openeconomy macroeconomic model, which of the following would be the MOST likely result? (1) This policy would lower the real exchange rate and increase net exports. {2) '"his policy would raise the real exchange rate and decrease net exports. {3) '"his policy would raise the real exchange rate and have no effect on net exports. {4) '"his policy would lower the real exchange rate and have no effect on net exports. 4. If national savings in Canada is insufficient to finance the purchase of domestic capital then: (1) Canadians are purchasing foreign assets and the net capital outow is negative. (2) Canadians are purchasing foreign assets and the net capital outow is positive. (3) the shortfall can be met by foreign investors and the net capital outow is negative. (4) the shortfall can be met by foreign investors and the net capital outow is positive. 5. If the government of Ontario succeeds in turning budget decits into budget surpluses. we would expect that: (1) Canada's net exports will increase and the real exchange rate will increase. (2.) Canada's net exports will decrease and the real exchange rate will decrease. (3) Canada's net exports will increase and the real exchange rate will decrease. (4) Canada's net exports and real exchange rate will both remain unchanged. 7. If there is a decrease in the size of the government budget decit, what are the effects of an increase in the supply,r of loanable funds? (1) Net capital outow decreases, and the real exchange rate increases. {2) Net capital outow increases, and the real exchange rate decreases. {3) Net capital outow and the real exchange rate both decrease. {4) Net capital outow and the real exchange rate both increase. 8. In an open economy. macroeconomic equilibrium requires that be in equilibrium simultaneously. (1) the foreign-currency exchange market and the federal bond market (2) the foreign-currency exchange market and the market for loanable funds (3) the market for loanable funds and the commodities market (4) the market for loanable funds and the federal bond market 9. In an open economy, what does the market for loanable funds equate national savings with? (1) Domestic investment (2) Net capital outow (3) The sum of national consumption and net exports (4) The sum of domestic investment and net capital outow