Use the following data to calculate equilibrium real GDP: C= .75Y, I = $2 trillion, G=$1 trillion and NX = -$0.5 trillion

In the classical model, we assume there is no ongoing inflation, so there is no need to distinguish between the nominal interest rate and the real interest rate

a. True b. False

Which of the following is the best description of the effects of an increase in the supply of bread?

a. Consumers will pay more for bread. b. Bread prices will fall, and bread sales will rise. c. A permanent surplus of bread will remain on the market. d. Bakers will have higher marginal costs.