Exercise 4. True, False, or Uncertain [44 Points] Indicate Whether the following statements are true, false or uncertain. Provide an argument for your responses. You may use the theory seen in class to support your answers. (a) [8 Points.] If the growth rate of aggregate productivity in the tradable sector in |the US is higher than the growth rate of aggregate productivity in the non-tradable sector in Japan then we should expect the real exchange rate of the US versus Japan (c = SPJQPG'H/PUS, where S is the dollar-price of one yen) to appreciate. (b) [8 Points] In an endowment economy where Ricardian equivalence holds, permanent changes in the timing of government expenditures should not affect the level of the current account. ((3) [8 Points] The imposition of import taris in Europe could lead to an depreciation of the real exchange rate of Europe versus the US (6 = SPUS/PEWGPE, where S is the price of euros per dollar). (d) [8 Points.] If two economies have the same aggregate price function and the law of one price holds for all goods in both economies, then the absolute purchasing power parityr condition (PPP) between these two economies holds. (e) [6 Points] If absolute PPP holds between two economies then relative PPP also holds. (f) [6 Points] A high correlation between investment and savings in the US implies that international capital mobility is low