1. In which situation would the long-run aggregate-supply curve shift right?

a.if the government were to raise taxes on investment spending

b.if the government were to increase immigration

c.if the government were to increase the minimum wage

d.if the government were to increase the number of import tariffs

2. The price index in 2018 is 130, and in 2019 it is 143. What is the inflation rate?

a. 13 percent

b. 1.01 percent

c. 10 percent

d. 43 percent

3. Which of the following shifts the short-run, but not the long-run, aggregate supply right?

a.a decrease in the price level

b.a decrease in the savings rate

c.a decrease in the expected price level

d.a decrease in the natural rate of unemployment

4. Which statement best describes the effects of a fall in the price level?

a.Dollars become less valuable, and interest rates rise.

b.Dollars become less valuable, and interest rates fall.

c.Dollars become more valuable, and interest rates fall.

d. Dollars become more valuable, and interest rates rise.

5. In Canada, a cup of hot chocolate costs $6. In Australia, the same hot chocolate costs 6 Australian dollars. If the exchange rate is $2 Australian dollars per Canadian dollar, what is the real exchange rate?

a.1/2 cup of Australian hot chocolate per cup of Canadian hot chocolate

b.2 cups of Australian hot chocolate per cup of Canadian hot chocolate

c.1 cup of Australian hot chocolate per cup of Canadian hot chocolate

d.3 cups of Australian hot chocolate per cup of Canadian hot chocolate

6. According to purchasing-power parity theory, if the same fast-food hamburger costs $4.00 in Canada and 8 euros in France, what should the nominal exchange rate be?

a.1 euro per dollar

b.1/4 euros per dollar

c.2 euros per dollar

d.1/2 euro per dollar