In Figure 1.6, at which of the following points would the opportunity cost of producing one more car be the lowest?

Gross investment is equal to

A) depreciation minus net investment. B) net investment plus capital stock. C) depreciation plus net investment. D) net investment minus capital stock.

In the two-country model of the Monetary Approach, the spot exchange rate is determined by

A) the relative quantities of money supplied and demanded. B) the real money stock in country A vs. country B. C) the nominal incomes in the two countries. D) the ratio of prices in the economies.