Question

 QUESTIN 18

 Which one of the following would cause an increase in the aggregate supply?

 a. insecurity about jobs and future income.

 b. improvements in economic conditions in other countries.

 C. a decrease in labor supplied

 d. new discoveries of raw materials

 QUESTIN 19

 Which one of the following statements is correct?

 I. A drop in the foreign exchange value of the dollar would increase aggregate demand

 II. A decrease in the amount of money in circulation would increase aggregate demand

 a. I only

 b. Il only

 c. Both I and II

 d. Neither I nor II

 QUESTIN 20

 What will happen to the equilibrium price level and real GDP if aggregate demand increases and aggregate supply decreases?

 a. equilibrium price levels rise; the new level of real GDP is indeterminate.

 b.equilibrium real GDP rises; the new price level is indeterminate.

 c. equilibrium real GDP falls; the new price level is indeterminate.

 d. equilibrium price level falls; the level of real GDP is indeterminate.

Answer 1

18) d. New discoveries of raw materials

19) a. I only

20) a. Equilibrium price levels rise; the new level of real gdp is indeterminate.