20.
In the above figure, at the price level of 140 and real GDP of ______
(A) $5 trillion, firms will not be able to sell all their output.
(B) $15 trillion, consumers will not be able to buy all the goods and services they demand.
(C) $5 trillion, consumers will not be able to buy all the goods and services they demand.
(D) $15 trillion, firms will not be able to sell all their output.

21.In the above figure the economy is initially at point A on the aggregate expenditure curve $AE_0$. Suppose firms expect profits to increase and decide to increase investment. As a result ______ (A) there is a movement along $AE_0$ to a point such as B. (B) there is a movement along $AE_0$ to a point such as C. (C) the AE curve shifts downward to a curve such as $AE_1$. (D) the AE curve shifts upward to a curve such as $AE_2$.

22. Which of the following could lead to demandpull inflation? (A) an increase in the quantity of money (B) an increase in the money wage rate (C) a decrease in exports (D) an increase in oil prices

23. An increase in the expected inflation rate shifts the ______ (A) longrun Phillips curve upward. (B) longrun Phillips curve downward. (C) shortrun Phillips curve downward. (D) shortrun Phillips curve upward.

24. Suppose that the U.S. interest rate is 5 percent and the Japanese interest rate is 1 percent. The effect of this difference in the foreign exchange market is that ______ (A) investors expect the yen to depreciate against the dollar. (B) investors expect the yen to appreciate against the dollar. (C) financial capital stops moving. (D) a Japanese investor is guaranteed to make an additional 4 percent in yen terms by investing in the United States.

25. If net exports, X -M = $0, and the government sector has a deficit of $250 billion, then the private sector ______ (A) has a deficit that equals $500 billion. (B) has a deficit that equals $250 billion. (C) has a surplus that equals $250 billion. (D) has a surplus that equals $500 billion.

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