Other things the same, an increase in the price level causes the real value of the dollar to fall in the market for foreign-currency exchange
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose an economy produces milk and honey, and milk is plotted along the horizontal axis of the production possibilities frontier. The MRT is 2 at the current point of production
If the amount of milk produced is reduced by two units in order to produce one more unit of honey, then: A) the new point of production lies above the production possibilities frontier. B) the new point of production lies on the production possibilities frontier. C) the new point of production lies below the production possibilities frontier. D) we cannot determine where the new point of production lies relative to the production possibilities frontier.
Which of the following statements is NOT correct?
A. Tariffs hurt producers and help consumers in the country imposing the tariff. B. Tariffs always decrease economic domestic well-being if imposed by a small country. C. Tariffs can increase, decrease, or leave unchanged the country's economic well-being if imposed by a large country. D. Tariffs are likely to decrease world economic well-being.
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Suppose the Fed permanently increases the money supply by a given amount. Which of the following is most likely to occur in the long run as a result of this monetary policy action?
A. a reduction in the real interest rate B. an increase in employment C. a decrease in unemployment D. none of these