1. Suppose the United States and Sweden sign a free trade agreement. If real interest rates increase in Sweden but not in the United States, which of the following will be true of Swedish capital flow, the value of the krona, and exports?Capital Flow /Value of Krona / Exportsa. Inflow / Appreciate/ Increaseb. Inflow / Appreciate / Decreasec. Inflow / Depreciate / Increased. Outflow / Appreciate / Decreasee. Outflow / Depreciate / Increase2.Good/Service Quantity 2004 Unit Price 2005 Unit PriceBlue Jeans 2 $22.00 $25.00Cheeseburger 4 $3.00 $5.00Haircut 2 $12.00 $13.00Suppose a market basket of goods and services includes the following for two successive years. According to the table above, between the years of 2004 and 2005 the consumer price index increased bya. 6 percent. b. 12 percent. c. 16 percent. d. 20 percent. e. 22 percent.3. When inflation has reached a peak, economists would say that the economy has reached thea. trough of the business cycle. b. expansion of the business cycle. c. peak of the business cycle. d. contraction of the business cycle. e. bottom of the business cycle.