5. An increase in the price of oil, an important input to production, will result in which of the following in the short run? (A) A decrease in the price level (B) A decrease in short-run aggregate supply (C) A decrease in unemployment (D) An increase in real wages (E) An increase in aggregate demand 6. An economy is currently operating at the full-employment level of output. Which of the following would result in a recessionary gap in the short run? (A) An increase in the costs of production (B) An improvement in the productivity of labor (C) An increase in money supply (D) A positive supply shock (E) A decrease in income tax rates 7. Thailand and Malaysia are trading partners. If the price level in Thailand decreases relative to the price level in Malaysia, what will happen to Thailand' 5 exports to Malaysia and Thailand's aggregate demand? Thailand' 8 Thailand' 8 Exports Aggregate Demand (A) Increase Decrease (B) Increase Increase (C) Increase Indeterminate (D) Decrease Decrease (E) Decrease Increase 8. Country X produces only apples and bananas. The following table shows prices and quantities of both products in two years. Apples $1 100 $2 80 10. Bananas $2 50 $2 60 Assuming year 1 is the base year, what is the nominal and real gross domestic product (GDP) for year 2 ? Nominal GDP Real GDP (A) $200 $280 (B) $200 $200 (C) $280 $200 (D) $280 $560 (E) $560 $280 . Which of the following is a fiscal policy action aimed at reducing unemployment? (A) Decreasing government expenditures (B) Decreasing income taxes (C) Decreasing tax credits (D) Increasing nominal interest rates (E) Increasing required reserves Increases in human capital can be achieved by which of the following? (A) Building more factories (B) Reducing immigration of skilled workers (C) Improving the quality of job-training programs (D) Increasing the physical capital per worker (E) Increasing government spending on infrastructure