Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.

If a regional trading agreement causes products from member countries to replace imports from nonmember countries, then the regional trading agreement will experience:

a. economic gains. b. trade creation gains. c. trade diversion losses. d. trade perversion

The relationship between NPV and IRR is such that :

a. both approaches always provide the same ranking of alternatives b. the IRR of a project is equal to the firm's cost of capital when the NPV of a project is $0 c. if the NPV of a project is negative, then the IRR must be greater than the cost of capital d. all of the above e. none of the above