Which of the following is/are true?

I.In the classical model of the LR small open economy, domestic national savings and domestic investment are never equal in equilibrium.

II.In the classical model of the LR small open economy, net capital outflow and net exports need not be equal in equilibrium.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

Which of the following is/are true?

I.In the classical model of the LR closed economy, domestic investment is inversely related to domestic real interest rate according to the investment spending function.

II.In the classical model of the LR small open economy, net exports is inversely related to domestic real interest rate according to the net exports function.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

Which of the following is/are true?

I.In the data, the increase in the budget deficit from the pre-Reagan period to the Reagan period leadinvestment spending to increase from the pre-Reagan period to the Reagan period.

II.In the data, the increase in the budget deficit from the pre-Reagan period to the Reagan period lead to trade deficit to decrease from the pre-Reagan period to the Reagan period.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

If the nominal exchange rate is 90Yen/CDN$, the price of a computer in Japan is 80000Yen and the price of a computer in Canada is 600CDN$, the real exchange rate is

Select one:

A.1.481 Japanese computer/Canadian computer

B.0.675 Japanese computer/Canadian computer

C.0.675 Canadian computer/Japanese computer

D.12000 Canadian computer/Japanese computer

Which of the following is/are true?

I.In the classical model of the LR closed economy, when real interest rate increases, the investment spending schedule will not shift in the loanable funds market diagram.

II.In the classical model of the LR small open economy, when autonomous domestic investment increases, the domestic investment spending schedule will shift right in the domestic loanable funds market diagram.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

Which of the following is/are true?

I.In the classical model of the LR small open economy, net exports is the sum of exports and imports.

II.In the classical model of the LR small open economy, when net capital outflow is positive, the domestic economy is a net borrower.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

In the long run, when a small open economy increases its government purchases (G>0)

I.domestic national savings will not change in equilibrium.

II.net capital outflow will decrease in equilibrium.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

In the classical model of the LR small open economy, when domestic autonomous consumption increases (C0>0)

I.domestic investment spending will decrease in equilibrium.

II.domestic real interest rate will not change in equilibrium.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

In the classical model of the LR small open economy, when domestic government purchases increase (G>0)

I.net exports will increase in equilibrium.

II.domestic currency will appreciate in equilibrium.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

In the long run, when domestic autonomous consumption increases (C0>0)

I.domestic real interest rate will decrease in a closed economy setting.

II.the real exchange rate will increase in a small open economy setting.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.