Refer to the information provided in Figure 5.6 below to answer the question that follows.
Figure 5.6Refer to Figure 5.6. The market is initially in equilibrium at the intersection of the demand curve and supply curve S2. If supply shifts from S2 to S1, which of the following statements is true?
A. Price will still serve as a rationing device causing quantity demanded to rise from 10 to 12 pizzas.
B. There is no need for price to serve as a rationing device in this case because the new equilibrium quantity is less than the original equilibrium quantity.
C. The market cannot move to a new equilibrium unless demand shifts at the same time that supply shifts.
D. Price will still serve as a rationing device causing quantity supplied to exceed 12 pizzas.
Answer: A
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Use the following graph for a private closed economy (an economy with only a private sector and no international trade) to answer the next question. 
In this economy, investment is
A. $50 billion. B. $150 billion. C. $100 billion. D. $200 billion.
The demand for reserves increases as the price level rises because
a. people want money to buy goods that will appreciate with inflation. b. people need more money to finance transactions. c. the opportunity cost of holding money increases. d. higher prices reduce the value of dollar assets.
Which of the following is an example of U.S. foreign direct investment?
a. A U.S. based mutual fund buys stock in Eastern European companies. b. A U.S. citizen builds and operates a coffee shop in the Netherlands. c. A Swiss bank buys a U.S. government bond. d. A German tractor factory opens a plant in Waterloo, Iowa.
The difference between the nominal interest rate and the real interest rate is:
A. the inflation rate. B. taxes. C. seigniorage. D. hyperinflation.