Use the following graph to answer the next question.Assume the economy is initially located on AD0 and AS0. An increase in the exchange rate and a decrease in worker productivity would result in price ________ and real domestic output ________.

If the Fed wishes to decrease the money supply it can:

A. Raise the discount rate. B. Buy bonds on the open market. C. Decrease the required reserve ratio. D. Decrease the federal funds rate.

You are unable to sleep because your hotel room is right underneath the noisy air conditioning system. We would classify this situation as an

A. external cost. B. internal cost. C. external benefit. D. internal benefit.