1. If a clothing manufacturer purchased a computerized sewing machine from an American company, then

consumer spending and GDP both increase.

investment and GDP both increase.

consumer spending increases and GDP decreases.

investment increases and GDP decreases.

consumer spending and investment both increase.

2. When the production possibilities curve increases, a corresponding

increase would take place with aggregate demand.

decrease would take place with aggregate demand.

decrease would take place with short-run aggregate supply.

decrease would take place with long-run aggregate supply.

increase would take place with long-run aggregate supply.

3. Given a normal market demand curve for Guess™ watches, if the price of Guess™ watches decreases from $35 to $32.50, then there is a(n)

increase in demand for Guess™ watches.

increase in quantity demanded of Guess™ watches.

decrease in demand for Guess™ watches.

decrease in quantity demanded of Guess™ watches.

decrease in supply of Guess™ watches.

4. If the U.S. dollar price of the Danish krone increases, then

the U.S. dollar has appreciated.

the Danish krone has depreciated.

the Danish krone has appreciated.

both the Danish krone and the U.S. dollar have appreciated.

both the Danish krone and the U.S. dollar have depreciated.

5. Suppose interest rates rise in the United States, but they don’t rise in other nations. As a result of this change, which of the following is true?

I. The demand for the U.S. dollar will increase

II. The demand for the U.S. dollar will decrease

III. U.S. exports will decrease as a result of the changing value of the U.S. dollar.

IV. U.S. exports will increase as a result of the changing value of the U.S. dollar.

I only.

I and IV only.

I and III only.

II and IV only.

II and III only.

6. The U.S. dollar is currently trading for 1.31 Bulgarian levas (BGN) per dollar. If the exchange rate adjusts to 1.5 Bulgarian levas per 1 U.S. dollar then

the BGN has appreciated.

the U.S. dollar has appreciated.

the U.S. dollar has depreciated.

both the BGN and the U.S. dollar have appreciated.

both the BGN and the U.S. dollar have depreciated.