Suppose the government of a small open economy reduces social welfare benefits. Which of the following statements or graphs correctly indicate the long-run economic impact of the fiscal policy change on the small open economy according to the classical model?Note: This is a multiple-answer question; thus, more than one option may be correct.a.b.National saving decreases.c.

Suppose the government of a very large open economy implements a contractionary fiscal policy. Which of the following statements or graphs correctly indicate the long-run economic impact of the foreign fiscal policy on a small open economy according to the classical model?Note: This is a multiple-answer question; thus, more than one option may be correct.a.Domestic output decreases.b.Domestic output remains unchanged.c.d.

Suppose the government of a closed economy reduces social welfare benefits. Which of the following statements or graphs correctly indicate the long-run economic impact according to the classical view with fixed supplies of labour and capital?

Assume the graph below indicates the long-run impact on the loanable funds market of a closed economy. Select all scenarios for which the above graph correctly illustrates the long-run effect according to the classical model.Note: This is a multiple-answer question; thus, more than one option may be correct. a. An increase in government expenditure. b. A decrease in transfer payments. c. A decrease in taxes. d. A decrease in government expenditure.

Suppose the government of a large open economy implements an expansionary fiscal policy. State and briefly explain the long-run impact on a small open economy's real exchange rate and net exports.

Suppose the government of Lilliput, a closed economy, reduces its spending and net taxes by the same amount. Briefly discuss the long-run impact on private saving, public saving, national saving, the domestic real interest rate, and investment according to the classical model of a closed economy (5 marks).Note: Explain your answers for national saving, the domestic real interest rate and investment by mentioning the impacted curve(s) and direction of curve shifts in the market for loanable funds.