QUESTION 1

1). Which of the following is true:

(1). Interest rate differentials affect savings and investments, while inflation differentials affect trade

(2). Interest rate differentials affect trade, while inflation differentials affect savings and investments

(3). Interest rate differentials affect savings and investments, while inflation differentials affect the balance of payments

		1 and 2 are only true
		2 and 3 are only true
		All is true
		only 1 is true