What causes fluctuations in the economy's output of goods and services in the short run?

Shifts in aggregate supply

Shifts in aggregate demand

Changes in long-term growth rates

Changes in the labor market

What happens to the aggregate supply when there is an increase in the number of workers and immigration?

It shifts to the left

It remains unchanged

It shifts to the right

It depends on the change in aggregate demand

Which of the following is true about the shift in net export to the left?

A recession in Europe would lead to an increase in net export.

An economic boom in Europe would lead to a decrease in net export.

A recession in Europe would lead to a decrease in net export.

An economic boom in Europe would lead to an increase in net export.

Which of the following is true about the factors that can cause changes in consumption?

Consumption never changes due to external factors such as a war or a stock market crash.

Consumption can only change due to individual factors such as income or preferences.

Pessimism caused by external factors can lead to a decrease in consumption, while optimism can lead to an increase in consumption.

Changes in consumption due to external factors are only seen in the long run, not in the short run.

Which of the following is true about the net export effect?

An increase in prices leads to an increase in net exports.

A decrease in prices leads to an increase in net exports.

A decrease in prices leads to a decrease in interest rates, which leads to an increase in net exports.

A decrease in prices leads to a decrease in interest rates, which leads to a decrease in net exports.

Which of the following is true about the interest rate effect in investment?

An increase in prices leads to an increase in investment.

A decrease in prices leads to a decrease in investment.

A decrease in prices leads to a decrease in interest rates, which leads to an increase in investment.

A decrease in prices leads to an increase in interest rates, which leads to a decrease in investment.

Which of the following statements is true about the wealth effect and the price level?

The wealth effect states that when prices fall, consumers feel poorer and they buy less

The wealth effect only applies in the long run, not the short run

A decrease in the price level will lead to a decrease in consumption due to the wealth effec

The wealth effect states that when prices fall, consumers feel wealthier and they buy more, leading to an increase in consumption in the short run.

Which of the following options best describes the categories into which any dollar that is in GDP can be placed?

Income, expenses, and investments

Consumption, savings, and investment

Consumption, investment, government spending, and net exports

Taxes, government spending, and transfer payments

Which of the following is true about price and wage stickiness?

In the short run, prices and wages always adjust immediately to changes in supply and demand.

In the long run, prices and wages are less flexible and will not adjust to changes in supply and demand.

Price and wage stickiness refers to the phenomenon where prices and wages may not adjust immediately to changes in supply and demand in the short run.

Price and wage stickiness only affects prices, not wages.

Which of the following statements is true about measuring income in the economy?

We use employment to measure income.

We use inflation to measure income.

We use output to measure income.

We use interest rates to measure income.

Which of the following is true about macroeconomic variables?

Macroeconomic variables never move together.

Macroeconomic variables always move in the same direction and in the same amount.

Macroeconomic variables may move together, but not necessarily in the same direction or in the same amount.

Macroeconomic variables may move together, but only during periods of economic expansion.

Which of the following best describes the concept of aggregate demand and supply?

The demand and supply for a single product in the economy

The demand and supply for all products in the economy individually

The demand for everything in the economy all at once and the supply of everything in the economy

The demand and supply for everything in the economy, but only in the short run

Which of the following best defines a small open economy?

An economy that is closed to international trade and has a small population

An economy that is open to international trade but has a small population

An economy that is closed to international trade but has a large population

An economy that is open to international trade and has a large population.

Which of the following statements is true about the relationship between net capital outflow and net export?

Net capital outflow and net export have no relationship to each other.

An increase in net capital outflow leads to an increase in net export.

A decrease in net capital outflow leads to an increase in net export.

The relationship between net capital outflow and net export depends on other factors in the economy.

Which of the following options correctly identifies the impact of trade policies on the trade balance?

Trade policies do not affect the trade balance

Trade policies always lead to a decrease in the trade balance

Trade policies always lead to an increase in the trade balance

The effect of trade policies on the trade balance depends on their impact on national savings and domestic investment.

Which of the following statements is true about the relationship between net capital outflow and national savings and investment?

National savings and domestic investment have no impact on net capital outflow.

An increase in national savings will lead to an increase in net capital outflow.

An increase in domestic investment will lead to a decrease in net capital outflow.

A decrease in the world interest rate will lead to a decrease in net capital outflow.

Which of the following is true about the effect of a Canadian resident importing a car from Japan?

The quantity of dollars demanded increases.

The quantity of dollars demanded decreases.

The quantity of dollars supplied increases.

The quantity of dollars supplied decreases.

Which of the following statements best describes the equilibrium real exchange rate?

The exchange rate at which the supply of dollars is greater than the demand to buy foreign assets.

The exchange rate at which the demand for dollars is greater than the supply to buy net exports.

The exchange rate at which the number of dollars people supply to buy foreign assets exactly balances the number of dollars people demand to buy net exports.

The exchange rate at which there is no demand or supply for foreign currency.

Which of the following is a reason why the foreign currency exchange market exists?

To allow people to purchase goods and services from other countries without exchanging currency.

To facilitate international trade by enabling the exchange of one currency for another.

To prevent foreign investment in a country's economy.

To promote the use of a single global currency.

Which of the following statements explains why the domestic interest rate should be equal to the global interest rate in a small open economy?

A. If lenders ask for a higher interest rate than what is globally available, the borrowers would go to the global market where it is cheaper.

B. If borrowers insist on a lower rate, then the lenders would lend in global markets.

Both A and B are correct.

None of the above is correct.