Consider the DD-AA model for the determination of exchange rate of a small country, who is a major oil producer, and assume that its economy is originally set in producing at its potential output. (i) What will be the impact on the country's exchange rate if a world crisis leads to a large increase in the price of oil? Consider also the effect that such an increase will have on the country's oil producing sector. [7%] (ii) If the country maintains a fixed exchange rate regime, what do you expect to happen? What do you believe the impact will be on the other sectors of the economy? Discuss your findings. [6%] Assume that the rest of the world is heavily depended on oil as an input for its production, whereas this is not the case for the country in question