9. In a small open economy, net exports NX depend negatively on the real exchange rate, which moves in line with the nominal exchange rate (the foreigncurrency price of domestic currency) because domestic and foreign goods prices P and P are sticky. Net exports also depend negatively on domestic income Y. There is perfect mobility of capital, so balance-of-payments equilibrium requires that i=i, where i and i are the domestic and foreign interest rates. Consumption C depends positively on disposable income YT with a marginal propensity to consume between 0 and 1 . Investment depends negatively on i. The government's budget deficit is D=GT, where G is government expenditure and T is taxes. It has been observed that government budget deficits D>0 sometimes coincide with current-account deficits (CA=NX0 sometimes coincide with current-account deficits (CA=NX