A small open economy with perfect capital mobility is currently in its long-run equilibrium with a balanced trade. Due to higher energy costs, the (domestic) government increases its subsidies to both local residents and businesses. Use the long-run classical model of a small open economy to discuss the long-run effects of this provision of subsidies on the levels of output, real interest rate, trade balance, and both nominal and real PG'DC exchange rates. Explain and support your answer with one loanable fund market diagram M foreign exchange market diagram. Be sure to explain why the variables of interest change or remain unchanged