Part I. True, False, Uncertain. State whether each of the following statements is true, false or
uncertain and explain your answers. Your score depends on the quality of your answer.
1.1 The U.S. Fed's exit from its current quantitative easing would lead to a decrease in Canada's
exports and hence output.
1.2 In a small open economy with imperfect capital mobility, a tax cut will initially lead to a
balance-of-payment surplus.
