The largest percent of colonial trade (both exports and imports) was with

Suppose the economy is in long-run equilibrium. If the government decreases its expenditures, eventually the decrease in aggregate demand causes price expectations to

a) fall. This fall in price expectations shifts the short-run aggregate-supply curve to the right. b) fall. This fall in price expectations shifts the short-run aggregate-supply curve to the left. c) rise. This rise in price expectations shifts the short-run aggregate-supply curve to the right. d) rise. This rise in price expectations shifts the short-run aggregate-supply curve to the left.

If Joe receives an increase in his wage rate and decides to decrease his hours worked, the

A) substitution effect and the income effect must be equal. B) substitution effect must exceed the income effect. C) income effect must exceed the substitution effect. D) substitution effect must be zero.