Which of the following policies tends to cause the dollar to appreciate?
A. a combination of an expansionary monetary policy and a contractionary fiscal policy
B. an expansionary fiscal policy
C. a contractionary fiscal policy
D. an expansionary monetary policy
Answer: B
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In the classical model, a change in aggregate demand
A) causes changes in both the long-run real GDP and in the price level. B) causes a change in long-run real GDP but not in the price level. C) causes a change in the price level but not in the long-run real GDP. D) has no effect on either real GDP or the price level.
If the world price for a good is above a nation's pre-trade equilibrium price, then the nation
A) will export the good. B) will import the good. C) will neither export nor import the good. D) cannot gain from trade. E) Both C and D.
The accompanying figure shows Avery's weekly production possibilities curve for scarves. 
Avery's PPC would shift outward if she:
A. devotes more time to knitting each week. B. devotes less time to knitting each week. C. knits more red scarves and fewer blue scarves each week. D. knits fewer red scarves and more blue scarves each week.
Answer the following statement(s) true (T) or false (F)
1. Consumers use bounded rationality to take shortcuts in mental processing. 2. Rules of thumb tend to make people less confident. 3. Framing occurs when consumers treat money differently depending on where they got it. 4. Anchoring occurs when people rely heavily on the first piece of information offered when making a purchase. 5. The traditional consumer choice model predicts and explains most consumer behavior quite well most of the time.