Exam 8: Production and Costs

The purchases made by the foreign sector are called __________; the purchases made by the household sector are called __________; the purchases made by the government sector are called __________; and the purchases made by the business sector are called investment.

Suppose the real exchange rate of 115 Japanese yen to the dollar changes to 105 yen to the dollar.In this situation,the dollar has __________,making Japanese goods __________ expensive for Americans.

A change in Real GDP in the short run can be brought about by a change in

-Refer to Exhibit 8-2.What word (rises or falls)should go in blank (1)and blank (2),respectively,to summarize the resulting impact on short run equilibrium of the given change in the economy?