An increase in government purchases, an increase in the interest rate, and an increase in consumption all shift the aggregate expenditure line upward

Suppose that the economy is in long-run equilibrium and the government decided to engage in unexpected contractionary policy by decreasing the money supply

If we assume rational expectations, which of the following statements is correct about the effect of contractionary policy in the long run? A) The unemployment rate will decrease, real GDP will decrease and the price level will decrease. B) The unemployment rate will increase, real GDP will increase and the price level will increase. C) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will decrease. D) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will increase.

Suppose $1 will buy 150 yen in January and 200 yen the following December. This change could have occurred if the

A) demand curve for dollars shifted rightward. B) demand curve for dollars shifted leftward. C) supply curve of dollars shifted rightward. D) demand curve for yen shifted rightward.