1. Germany's currency is euro (). Germany's important trading partner is the U.S.Suppose the exchange rate falls from 1.20 per U.S. dollar to 1.10 per U.S. dollar. Ceteris paribus, German exports will _____, German imports will ____, and German aggregate demand will _____.
   1. decrease; increase; decrease
   2. decrease; increase; increase
   3. increase; decrease; increase
   4. increase; increase; increase

2. Suppose the economy is experiencing a recessionary gap. According to AS-AD model, in the long run, if aggregate demand does not change, the money wage rate ____, unemployment ____, and the price level _____.

1. falls; rises; falls
2. falls; falls; falls
3. rises; rises; rises
4. rises; falls; rises

3. Suppose the Central Bank lowers interest rates. As a result, in the short run, real GDP will most likely ___ and the price level will most likely ____.

1. increase; rise
2. increase; fall
3. decrease; rise
4. decrease; fall

4.GDP equals

1. aggregate expenditure
2. aggregate income
3. the value of the aggregate production in a country during a given time period.
4. all of the above