1.Assume the economy has been operating at full employment levels of output and price level. A significant depreciation of the U.S. dollar vs. an index of foreign currencies would affect aggregate demand and equilibrium output in which of the following ways?

a. Decrease in aggregate demand and a decrease in equilibrium output

b. Decrease in aggregate demand and indeterminate for equilibrium output

c. Increase in aggregate demand and an increase in equilibrium output

d. Increase in aggregate demand and no change in equilibrium output

e. No change in aggregate demand and increase in equilibrium output

2.An increase in energy costs will most likely cause the price level and real gross domestic product to change in which of the following ways?

a. Increase in price level and increase in real GDP

b. Increase in price level and decrease in real GDP

c. Increase in price level and no change in real GDP

d. Decrease in price level and increase in real GDP

e. Decrease in price level and decrease in real GDP