Question $29$

$2$ pts

Statement: when the government implements the first fiscal policy, c$,s^{**},i^{**}$ and $r^{**}$ will not change.

This statement

$$ is false because we$,$ rational people, will increase our consumption

is false because it may not hold in a small open economy

true no matter whether the economy is a closed economy, a small open economy or a large open economy.

may be false if the tax cut is $$2$ rather than $$1($the number used in the lecture$)$