Consider a closed economy without a government and without international trade. What will be TRUE when this economy is in equilibrium?
A) Planned real consumption spending equals real GDP.
B) Total planned real investment spending will exceed total planned real expenditures.
C) Planned real consumption spending plus planned real investment spending equals real GDP.
D) Planned real investment spending will exceed real planned saving.
Question 2
An expansionary monetary policy results in lower interest rates, which in turn
A) reduces the international price of the dollar and increases net exports.
B) increases the foreign demand for U.S. financial instruments, lowering the international price of the dollar and decreasing net exports.
C) reduces the foreign demand for U.S. financial instruments and reduce net exports.
D) increases foreign demand for U.S. financial instruments, raising the international price of the dollar and reducing net exports.
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