A firm with a fixed cost of $300 every month and variable cost of $200 every month decides to shut down. In such a situation it would lose:

Refer to the above figure. Other things being equal, if price is at P2, then we would expect

A) price to decline until an equilibrium is achieved at P0. B) consumers to reduce their offering price for the good. C) an excess quantity demanded to occur. D) consumers to bid against each other for goods and force the price still higher.

Assume the Marshall-Lerner condition holds. Which of the following will cause a reduction in net exports?

A) a reduction in government spending B) a reduction in investment C) an increase in foreign output D) an increase in the real exchange rate E) all of the above