A)

If model 2 is extended so that we assume that private consumption decreases if interest rates increase, the multiplier will: a. Get bigger b. Decrease and then stabilize c. be unchanged d. Be greater than 1.5 e. Become smaller

B)

If the authorities reduce the income-dependent tax at the same time as the total tax level is unchanged in model 2, the following will: a. The IS curve becomes steeper and the UIP curve becomes slacker b. The IS curve remains unchanged c. The IS curve becomes slacker d. The LM curve shifts outwards e. The IS curve and the UIP curve become slacker

C)

If the expected krone exchange rate falls in model 2, will: a. IS- and LM- be unchanged b. The IS curve becomes slacker c. The UIP curve becomes slacker d. The UIP curve becomes steeper and the IS curve slackens e. The UIP curve becomes steeper

D)

If international interest rates rise in model 2, will: a. The IS curve becomes slacker b. The UIP curve becomes slacker c. The UIP curve becomes steeper and the IS curve slackens. d. The UIP curve becomes steeper e. IS- and LM- be unchanged