Aggregate supply is the quantity of goods and services that consumers wish to buy at different price levels during a given period of time

When comparing monetary and fiscal policy under fixed and floating exchange rate regimes, which of the following statements is FALSE?

A) In a floating exchange rate regime, an expansionary monetary policy is effective by stimulating spending and by depreciating the currency. B) In a floating exchange rate regime, an expansionary fiscal policy is effective by stimulating spending, though there may be crowding-out effects due to higher rates of interest and currency appreciation. C) In a fixed exchange rate regime, an expansionary monetary policy is effective by stimulating spending; it has no impact on the currency value or the trade balance. D) In a fixed exchange rate regime, an expansionary fiscal policy is effective by stimulating spending, as long as the parallel expansionary monetary policy keeps exchange rates stable.

Refer to the figure above. A one unit increase in labor supply will lead to ________ in output in Country X than in Country Y

A) a smaller increase B) a smaller decrease C) a larger decrease D) a larger increase