$1)[4$ points$]$ In the loanable funds market model, assuming everything else is constant, which curve $($supply of funds or demand for funds$)$ is affected if there is an increase in national saving? How will equilibrium real interest rate and equilibrium quantity of loans change as a result?

$2)[3$ points$]$ When would the Federal Reserve want to carry out a monetary policy to decrease aggregate demand?

$3)[4$ points$]$ i$)$ What happens to the value of nominal interest rate in the economy when the Federal Reserve buys government securities$?$

ii$)$ What happens in the AD$-$AS model graph when the Federal Reserve buys government securities$?$

$4)$ Suppose an economy is producing real GDP of $\backslash (\backslash$$ $600\backslash )$ billion. Potential GDP is equal to $\backslash (\backslash$$ $540\backslash )$ billion, and the MPC is equal to $0\mathrm{.}6.$

i$)[2$ points$]$ What kind of a gap $($or problem$)$ is this country experiencing?

ii$)[4$ points$]$ What policy action do you suggest the government to take to eliminate the gap? State both the specific type of policy action and its size. Show your work for partial credit.

$5)[4$ points$]1$ USD was trading for $114$ Japanese yens on December $9,2021,$ and then the value of USD increased to $150$ U$.$S$.$ Japanese yens on October $20,2022.$

How would this change affect U$.$S$.$ exports to Japan: the demand for US goods and services by Japan? How would this change affect U$.$S$.$ aggregate demand curve?

$6)[2$ points$]$ Above chart shows the exchange rate between USD and euro the during the last five years $-$ it shows price of $1$ euro in USD; how much $1$ euro is worth in USD.

On April $3,2020,$ the rate was $1$ euro $=1\mathrm{.}08$ USD.

On May $28,2021,$ the rate was $1$ euro $=1\mathrm{.}22$ USD.

Using what you learned in this course, state which currency appreciated, and which currency depreciated between these two dates $(4/3/2020$ and $5/28/2021)?$