An increase in Demand for U.S. Exports in Europe will

a. Cause the U.S. Dollar to Appreciate

b. Cause the U.S. Dollar to Depreciate

c. Cause the Euro to Depreciate

d. Cause the Euro to Appreciate

e. Both A and C

True or False: Potential GDP is not effected by price changes

a. True

b. False

Real Exchange Rates depend on

a. The price level between the two countries

b. Government Purchases

c. Nominal wages

d. Nominal interest rates

True or False: Potential GDP changes always shift the LRAS curve and the SRAS curve

a. True

b. False

Which of the following does not cause a recessionary gap

a. A fall in labor productivity

b. A decrease in government expenditures

c. An increase in Taxes

d. A decrease in investment expenditures