1. Small open economy NX, RER, e? a. A fall in consumer confidence about the future C decrease S increase? b. Do Consumers prefer foreign cars over domestic cars? c Introduction of ATM reduces the demand for money? 2. Foreign countries begin to subsidize investment by instituting an investment or edit tax. a. What happens to world investment demand as a function of the world interest rate? b. What happens to the world interest rate? c. What happens to the investment in our small open economy? d. What happens to our trade balance? e. What happens to our real exchange rate?.