A currency appreciation reduces aggregate demand and raises aggregate supply.

Compared to the magnitude of the multiplier in an economy without imports, the multiplier in an identical economy with imports is

A) larger only if exports exceed imports. B) smaller only if imports exceed exports. C) always larger. D) exactly the same. E) always smaller.

When the existing firms in a monopolistically competitive industry earn above-normal profit:

a. new firms enter into the market, and entry continues until firms earn normal profit. b. new firms have no incentive to enter the market. c. new firms have an incentive to enter the market but are legally barred from doing so. d. they increase their production and lower the price level. e. their cost structure automatically changes, eliminating the additional profit.