The new classical explanation of aggregate supply in the short run builds on research by

In the consumer's NPV decision, the correct value for the interest rate R is

A) the interest rate that could be earned in a savings account when the consumer must borrow to finance the purchase. B) the interest rate that would have to be paid on a loan when the consumer could pay for the purchase with funds in a savings account. C) the interest rate charged for the loan when the consumer must borrow to finance the purchase. D) the prime rate, irrespective of whether when the consumer must borrow to finance the purchase. E) the prime rate plus the rate of inflation as measured by the CPI, irrespective of whether when the consumer must borrow to finance the purchase.

If the MPS is 1/3, a $100 increase in net exports will

A. increase real Gross Domestic Product (GDP) by $100. B. reduce real Gross Domestic Product (GDP) by $100. C. reduce real Gross Domestic Product (GDP) by $300. D. increase real Gross Domestic Product (GDP) by $300.