Suppose there are five goods in the economy, A-E. The current-year quantity of each is 10A, 20B, 30C, 40D, and 50E. Current-year prices are $1 for each unit of A, $2 for each unit of B, $3 for each unit of C, $4 for each unit of D, and $5 for each unit of E. Base-year prices are $1 for each good. Real GDP in the current year equals _________ and GDP equals _________

The most important characteristic of the equilibrium price is that it: a. guarantees that producers earn profit. b. clears the market

c. increases the quantity demanded. d. decreases the quantity demanded.

Which of the following statements is true?

A. Under floating exchange rates, external capital-flow shocks can have effects on internal balance by altering the exchange rate and the country's international price competitiveness. B. Monetary policy is a powerful economic tool for a country with fixed exchange rates and high capital mobility. C. An expansionary monetary policy tends to increase the exchange rate value of the domestic currency in the short run. D. Fiscal policy for a country with floating exchange rates is more powerful with a high degree of capital mobility than with a low degree of capital mobility.