Refer to the information provided in Figure 6.2 below to answer the question(s) that follow. Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle's budget is AC. At which point does Mr. Lingle spend exactly his income?

If imports are $1,200 billion and exports are $1,300 billion, while net interest income and net transfers are zero, what is the current account balance?

What will be an ideal response?

A firm is currently producing an output at which price equals the minimum point on the average variable cost curve. If wage rates increase, the firm will

A) increase its rate of output to make up for the higher variable costs. B) shut down since it would no longer be covering its variable costs. C) decrease its rate of output to offset the higher variable costs. D) not make any changes since its current rate of output is still minimizing its losses.