Question 5 a. Why are net exports and net capital outflow always equal? (5 marks) 1:). Under what circumstances does purchasillgipower parity explain how exchange rates are determined, and why is it not completely accurate? (5 marks) c. Discuss (with the aid of loanable funds. market and foreign exchanges market diagrams) the effect of a government budget surplus on national saving, domestic investment, net capital outow, interest rate, exchange rate and trade balance. (15 marks)