On the graph above, suppose the economy is at point F when there is a permanent positive supply shock. The new long-run equilibrium is at point ________

We should expect the consumption function to shift downward if

A. real interest rates rise. B. price levels fall. C. consumers become more optimistic about future incomes. D. consumers become more pessimistic about future incomes.

Concern about the ability of independent foreign firms to maintain product quality

A. is an inherent disadvantage faced by the multinationals. B. makes FDI preferable to licensing firms in the foreign markets. C. makes licensing firms in the foreign markets preferable to foreign direct investment (FDI). D. often results in the formation of a license agreement between a foreign firm and a multinational enterprise.