Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:

The IS curve ________ when the real interest rate increases

A) shifts to the right B) shifts to the left C) shifts up D) all of the above E) none of the above

Assuming that good "x" is measured on the x-axis and good "y" is measured on the y-axis, if the utility for the two goods "x" and "y" can be measured as U = y, then it can be concluded that

A) "x" and "y" are perfect complements. B) "x" is a "bad". C) the indifference curves on the x,y graph are upward sloping. D) the indifference curves on the x,y graph are horizontal.