. Consider an exogenous transitory shift in taste away from US goods. Use the simple AA 7 DD model to compare the shortrun effects of the shock on output under xed and exible exchange rates? Explain why one effect is larger than the other. . Use the simple AA DD model to determine whether a transitory increase in govern ment spending has a larger effect under xed or exible exchange rates. Explain. . Use the simple AA 7 DD model to show that an import tariff under xed exchange rates leads to increase in output. Explain what would happen if all countries in the world simultaneously tried to increase output by imposing tariffs? . Use the simple AA DD model to show that sterilized exchange market intervention has no effect on the exchange rate in the standard case. Show and explain how this changes if assets are imperfect substitutes and there are risk premia