Answer each question in this part with TRUE, FALSE, or UNCERTAIN. Provide a brief but clear explanation for your answer.

Q1:

An import substitution growth strategy is one where a country seeks economic development by opening itself up to international trade.

Q2:

" In the year 2018, Country A's real effective exchange rate (REER) showed depreciation over the year 2012 value while the nominal effective exchange rate (NEER) showed an appreciation."

The given information indicates that Country A's competitiveness has increased between 2012 and 2018.

Q3:

Real effective exchange rate and a country's trade competitiveness are negatively related.

Q4:

"Japan's national debt is close to 200 percent of GDP..." (report in Australian Financial Review, 4 June 2012). (Hint: refer to the national income identities for your answer).