The U.S. record is superior to that of Europe in ________

In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of

A) a decrease in the real interest rate. B) a decrease in the buying power of money. C) an increased expectation of a recession that lowers the expected rate of profit from investment. D) a decrease in the foreign exchange rate. E) an increase in the price level.

If an economy is operating on its production possibilities curve, it is:

A) efficient and fully employed. B) fully employed but not necessarily efficient. C) efficiently producing but not necessarily fully employed. D) inevitably going to grow in the future.