Suppose consumers decrease their consumption expenditure because ...

[tsand2]

Suppose consumers decrease their consumption expenditure because they worry about what their income will be in the future. There is
 
  A) a rightward shift of the aggregate demand curve.
  B) an upward movement along the aggregate demand curve.
  C) a downward movement along the aggregate demand curve.
  D) a leftward shift of the aggregate demand curve.

Question 2

Suppose that U.S. inflation is 3 percent and Turkish inflation is 70 percent. The effect of this discrepancy on the foreign exchange market is that
 
  A) the Turkish currency will depreciate.
  B) the dollar will depreciate.
  C) it is impossible for interest rate parity to hold.
  D) the Turkish currency will appreciate.

[dawsa925]

Answer to Question 1

D

Answer to Question 2

A