If the U.S. price level is increasing by 3 percent annually and the Japanese price level is increasing by 1 percent annually, then according to purchasing-power parity, by about what percent would the nominal exchange rate be changing?

On a graph of the consumption function, where the consumption function crosses the 45 degree line,

A) there is no saving and no dissaving. B) disposable income is zero. C) the maximum level of disposable income is earned. D) there are no tax payments. E) induced consumption equals zero.

The gap between potential GDP and real GDP had been as large as 7 percent during the worst of the 2007-2009 recession. By 2015, the gap

A) was positive, with real GDP exceeding potential GDP. B) had been eliminated. C) was still nearly 3 percent. D) remained at 7 percent.