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please answer with explanation a) (2? points] Suppose the economy of Protonio has reached its full employment level. Assume that the functions of exports and

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a) (2? points] Suppose the economy of Protonio has reached its full employment level. Assume that the functions of exports and imports of Protonio are linear: EX: o'i'ltYr -TF)+519 1MP = ro+rt(Y 43-729 where q is the real exchange rate. on. g . and yo are parameters {numbers} that can be positive or negative, and cl , ] . r] . g, and y; are para meters {numbers} greater than zero. Using the Keynesian cross and the Alt-DD models explain it the following statement is true or false: "In the short-run, a temporary exagenous decrease in imports [a lower l'n }. for example caused by the imposition of tariffs on imported goods, causes: ii] the aggregate demand to shift up in the Keynesian cross diagram: {ii} the DD schedule to shift down and to the right in the AADD diagram; {iii} an increase in output m: [iv] a decrease in the nominal exchange rate; {it} a decrease in the real exchange rate: {iii} an increase in consumption; and {vii} an increase in the interest rate .\" Describe why, in the short run, the variables change and do not forget to include an AA- DD diagram, a Keynesian cross diagram, and the aggregate demand function to support your answer. Assume a flexible exchange rate regime. 44

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