53. Assume the central bank of country X pursues an expansionary monetary policy, such as buying bonds. What will be the impact in the foreign exchange market?

A. The currency of country X will appreciate against the currency of its trading partners as residents of country X try to import more goods. B. The currency of country X will appreciate as foreigners try to buy more financial assets from country X. C. The currency of country X will depreciate as foreigners buy fewer goods from country X. D. The currency of country X will depreciate as interest rates in country X fall, and its financial assets will be less attractive. E. The currency of country X will depreciate, as its net exports will increase.

54. Which is the most expansionary combination of fiscal policies?

A. Increasing taxes and increasing government spending B. Decreasing government transfer payments and increasing government spending C. Decreasing taxes and increasing government spending D. Decreasing government spending and increasing the money supply E. Decreasing the money supply and increasing taxes

55. The policy actions taken by the government in discretion do not have much impact on the economy. Which of the following are potential weaknesses of discretionary fiscal policies?

A. Recognition lag; administrative lag; operational lag B. Recognition lag; inflation lag; data lag; decision lag C. Recognition lag; public input lag; data lag; operational lag D. Recognition lag; data lag; administrative lag; inflation lag E. Recognition lag; legislative lag; public input lag; data lag

56. Assume real GDP equals $30,000; the population is 20 and there are 15 labor employed. What is the value of GDP per capita and average labor productivity?

Real GDP per capita	Average labor productivity
$20	$15

Real GDP per capita	Average labor productivity
$1,000	$1,500

Real GDP per capita	Average labor productivity
$1,500	$2,000

Real GDP per capita	Average labor productivity
$2,000	$2,000

Real GDP per capita	Average labor productivity
$2,000	$30,000

57. Use the graph to answer the question that follows.