Suppose that the exchange rate between the U.S. dollar and the Mexican peso starts out at $0.12 per peso, and then changes to $0.09 per peso. The result will be that Americans will buy __________ pesos because Mexican goods become relatively __________ expensive

Which of the following is true of an increase in the federal government budget surplus? a. An increase in surplus results in a decrease in the national saving. b. An increase in surplus shifts the aggregate demand curve rightward. c. An increase in surplus increases the federal debt

d. An increase in surplus dampens aggregate demand in the short run. e. An increase in surplus increases the natural rate of unemployment.

Which of the following are both correct?

a. Data show no correlation between saving and measures of economic well-being. A reduction in tax rates may reduce saving because of the income effect. b. Data show no correlation between saving and measures of economic well-being. A reduction in tax rates may reduce saving because of the substitution effect. c. Data show a positive correlation between saving and measures of economic well-being. A reduction in tax rates may reduce saving because of the income effect. d. Data show a positive correlation between saving and measures of economic well-being. A reduction in tax rates may reduce saving because of the substitution effect.