Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar. In the U.S. economy this would be expected to
A. increase the U.S. trade deficit (or decrease the trade surplus).
B. decrease the U.S. trade deficit (or increase the trade surplus).
C. increase the U.S. trade deficit only if exports change by more than imports.
D. leave the U.S. trade deficit unchanged.
A. increase the U.S. trade deficit (or decrease the trade surplus).
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
When government spending exceeds government revenues during a given period of time
A) the national debt must be decreasing. B) a budget surplus exists. C) Congress is obliged to raise taxes. D) a budget deficit exists.
A buyer’s response to a change in income is an example of a “change in demand.”
Answer the following statement true (T) or false (F)
By law, the Federal Reserve is barred from
A. raising the reserve ratio to 20%. B. lowering the discount rate to 2%. C. selling more than $5 billion in United States government securities during any month. D. buying more than $5 billion in United States government securities during any month.