Question 10(1 point)

Which of the following statements is true?

a

A dollar depreciation discourages the purchase of imports in the U.S. because now one dollar can only be exchanged for less units of foreign currency, which makes our imported goods more expensive. As US imports decrease, AD increases.

b

If the dollar appreciates relative to another country's currency, AD increases.

c

A dollar appreciation discourages U.S. exports because now U.S. goods are relatively more expensive than before, since it takes more units of foreign currency to buy a dollar. As US exports fall, AD declines. The dollar appreciation also encourages more purchases of imports since one dollar can buy now more units of the foreign currency than before. As imports increase, AD declines.

d

All of the above.

e

Only a) and c)

Question 11(1 point)

Which of the following statements is true?

a

Theaggregate supply curveshows the value of real GDP at different price levels.

b

The shape of the aggregate supply curve is determined on the basis of whetherinput pricesandoutput pricesare fixed or flexible.

c

In thevery short-run, both input prices and output prices are fixed.

d

All of the above.

e

Only a) and b)

Question 12(1 point)

Which of the following statements is true?

a

Input prices are fixed by contractual agreements such as labor contracts.

b

Output prices may be fixed as a result of issuance of catalogs or price lists that are in effect for a stated period of time.

c

In thelong-run, input prices are fixed but output prices are variable. In theshort-run, input prices and output prices are flexible (they can change).

d

All of the above.

e

Only a) and b)