For a country with a fixed exchange rate and no sterilization: When the FE curve is flatter than the LM curve, a negative domestic spending shock to the IS curve creates a balance of payments deficit, which then causes the LM curve to shift to the left.

If tastes for a good decreased and the price of a substitute good decreased at the same time, as a result: a. prices would rise

b. prices would fall. c. larger quantities to be exchanged. d. we would not know which direction either prices or quantities exchanged would be altered without more information.

A monopoly

a. can increase the price and increase output at the same time b. can charge any price it wants and still sell all of its output c. can sell any output it produces provided it accepts the market price d. must lower the price in order to increase output e. faces a perfectly elastic demand curve