An increase in aggregate demand due to higher foreign income will ...

[Coya19@aol.com]

An increase in aggregate demand due to higher foreign income will cause:
 a. domestic equilibrium GDP to increase.
  b. domestic equilibrium GDP to decrease.
  c. domestic prices to fall.
  d. foreign prices to fall.
  e. foreign equilibrium GDP to fall.

Question 2

The best test of an economic theory is:
 a. the rigor of its mathematical formulation.
  b. its ability to explain and predict.
 c. the accuracy of its assumptions.
 d. the level of real-world detail it captures.

[Kimmy]

Answer to Question 1

a

Answer to Question 2

b