1. Suppose that in a small open economy the level of national saving is greater than the level of investment. In this case
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2. Suppose that households feel wealthier and decide to decrease their level of saving. In a small open economy the real exchange rate will ____ and net exports will ____.
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3. Suppose a government has been running a budget deficit for years and decides to move towards balancing the government budget. In a small open economy, investment spending will ____ and net exports will _____.
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4. Suppose there is an increase in the world interest rate. In a small open economy, the real exchange rate will ____ and the level of investment spending will ____.
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