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Answer the question on the basis of the following table for a particular country in which C is consumption expenditures,Ig is gross investment expenditures,G is government expenditures,X is exports,and M is imports.All figures are in billions of dollars.Each question is independent of other question using the same table,unless otherwise stated. Price Level128125122119116C$1820222426Ig$246810$33333$12345M$54321Real GDP\begin{array}{c}\begin{array}{c}\underline{\text {Price Level}}\\128 \\125 \\122 \\119 \\116\end{array}\begin{array}{c}\underline{\text {C}} \\ \$ 18 \\20 \\22 \\24 \\26\end{array}\begin{array}{c}\underline{\mathrm{I}_{\mathrm{g}} }\\ \$ 2 \\4 \\6 \\8 \\10\end{array}\begin{array}{c}\underline{\text {G }}\\ \$ 3 \\3 \\3 \\3 \\3\end{array}\begin{array}{c}\underline{\text {X }}\\\$ 1 \\2 \\3 \\4 \\5\end{array}\begin{array}{c}\underline{\text {M}} \\ \$ 5 \\4 \\3 \\2 \\1\end{array}\begin{array}{c}\underline{\text {Real GDP}} \\ \\\\\\ \\\\\end{array}\end{array} Refer to the table.A decline in the international value of the dollar would:


A) increase the values in columns (5) and (6) and reduce aggregate demand.
B) decrease the values in columns (5) and (6) and increase aggregate demand.
C) decrease the values in column (5) ,increase the values in column (6) ,and reduce aggregate demand.
D) increase the values in column (5) ,decrease the values in column (6) ,and increase aggregate demand.

E) A) and D)
F) All of the above

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A decline in investment will shift the AD curve to the:


A) left by a multiple of the change in investment.
B) left by the same amount as the change in investment.
C) right by the same amount as the change in investment.
D) right by a multiple of the change in investment.

E) A) and D)
F) None of the above

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If the dollar price of foreign currencies falls (that is,the dollar appreciates) ,we would expect:


A) aggregate demand to decrease and aggregate supply to increase.
B) both aggregate demand and aggregate supply to decrease.
C) both aggregate demand and aggregate supply to increase.
D) aggregate demand to increase and aggregate supply to decrease.

E) A) and B)
F) A) and C)

Correct Answer

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