An increase in government spending will force an appreciation of the dollar, which causes net exports to fall

Refer to Figure 2-14. What is the opportunity cost of producing 1 snow cone in Iceland?

A) 2/3 of a popsicle B) 3/4 of a popsicle C) 1 1/2 popsicles D) 180 popsicles

An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.

A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease