Current global economics situation

I just need informative answers to the questions below, please put a number of a question before answering it:

Question 1
The country “INVISIBLE” is a very small open economy in Asia. Mr. Clever, the most visible
economist of this country, writes: “The income tax decrease and the strong increase in imports
would have a similar effect on interest rate in this country. As a consequence, the inflow of
foreign capital (into this country) will increase in both cases.” Do you agree with this statement?
Answer this question using IS-LM model.

Question 2

The reduction of tariffs and non-tariff barriers in the context of the TTIP would decrease the
dead-weight losses and better enable the exploitation of comparative advantages in the EU and
the USA. On the other hand, this would create a strong oligopolistic market structure in both
continents. Do you agree?

Question 3
a) Those austerity measures in Portugal aim at not only improving the government’s budget
situation but also enhancing the competitiveness of this country. Do you agree? Answer
this question in the context of the Twin – deficit – hypotheses, the optimum currency area
(OCA) Theory and the IS – LM framework we studied.

b) In order to rapidly recover from the crisis, Greece should leave the Eurozone, (introduce
the flexible exchange rate system), and decrease the prime interest rate (i.e. Central bank
interest rate). What would be the macroeconomic justifications for this policy

Question 4
A number of economists argue that the EU single market has not yet been completed, due to the
problems related to VAT harmonization in the EU: its member states are against the introduction
of the so-called origin principle combined with the same VAT rates (in the EU 28). On the the
other hand , the same group of economists suggest that keeping the destination principle (which
does not fit to the “origin single-market philosophy”) has recently caused a large scale VAT
fraud in the EU. Assess their arguments.