If the real wage rate decreases from $14.00 per hour to $13.00 per hour, the
A) demand for labor increases.
B) quantity demanded of labor increases.
C) quantity supplied of labor increases.
D) equilibrium quantity of employment must decrease.
E) supply of labor increases.
B
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Assuming no change in the nominal exchange rate, how will a decrease in the price level in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The real exchange rate will be unaffected. C) The real exchange rate will fall. D) The impact on the real exchange rate cannot be predicted.
In the short-run, any rise in the real exchange rate, EP /P, will cause
A) an upward shift in the aggregate demand function and a reduction in output. B) an upward shift in the aggregate demand function and an expansion of output. C) a downward shift in the aggregate demand function and an expansion of output. D) an downward shift in the aggregate demand function and a reduction in output. E) an upward shift in the aggregate demand function but leaves output intact.