The full employment level of GDP is sometimes referred to as “potential GDP.”

________ in the foreign interest rate causes the demand for domestic assets to shift to the left and the domestic currency to ________, everything else held constant

A) An increase; appreciate B) An increase; depreciate C) A decrease; appreciate D) A decrease; depreciate

Tim Tupper contracts with two other students to help him provide a term paper-typing service. In the last two weeks of the semester, he sees a tremendous increase in demand. His profit-maximizing response would be represented by

a. a rightward shift of the supply curve because it is possible to earn economic profits b. a rightward shift of the supply curve because the increase in demand is probably only temporary c. a reduction in supply to take full advantage of the increase in demand d. a movement up to the right along the supply curve because the increase in demand is probably only temporary e. an upward movement in horizontal demand curve he faces because now he can charge a lower price