Part 1. Answer True or False at following sentences. (20 points, 4 points/question) 1. 2. 3. Temporary monetary expansion can be powerless to raise output or move the exchange rate when the economy is in a liquidity trap. Relative PPP predicts that percentage changes in exchange rates equal differences in national inflation rates. ( All else equal, a fall in the expected inflation rate will eventually cause a rise in the interest rate. ) A real appreciation of Korean products implies that Korean goods become more expensive and more valuable relative to other country products.( Real interest parity means differences in real interest rates between countries are equal to the spot change in the value of goods and services between them.( ) 4. 5