True Correct! False 1 / 1 pts Question 31 In a consumption function with income (Y) on the horizontal axis and consumption (C) on the vertical axis, a rise in the price level (all else constant) will cause a shift upward of the consumption function.

True False Correct! 1 / 1 pts Question 32 A fall in tao, the effective tax rate on capital will result in the investment demand function shifting to the right. True Correct! False 0 / 1 pts Question 33 The slope of the investment demand function indicates how sensitive investment is to changes in real interest rates. The 'flatter' the investment demand function, the less sensitive investment is to changes in the real rate of interest, all else constant. True You Answered False Correct Answer 1 / 1 pts Question 34 A rise in imports, all else constant, will increase net exports. True False Correct! 1 / 1 pts Question 35 If the US is growing faster than the rest of the world, then all else constant, the trade deficit will widen (get more negative assuming we were running a trade deficit to begin with). True Correct!

False 1 / 1 pts Question 36 If the inflation rate rises in China so that it exceeds that of the US, then net exports for the US should increase, all else constant. True Correct! False 0 / 1 pts Question 37 If the exchange rate between the US dollar and Japanese yen changes from $1 = 100 yen to $1 = 80 yen, then US exports to Japan will become more expensive to Japanese importers. True You Answered False Correct Answer 0 / 1 pts Question 38 We argued that cash flow (CF) increased during the Great Recession and thus, had a positive effect on investment. True You Answered False Correct Answer 1 / 1 pts Question 39 In a consumption function with income (Y) on the horizontal axis and consumption (C) on the vertical axis, a rise in stock market wealth, all else constant, will result in a movement along the consumption function. True

False Correct! 1 / 1 pts Question 40 The stronger the US dollar is relative to the rest of the world, all else constant, the larger the net exports in the US. True False Correct! 0 / 1 pts Question 41 A fall in the tax rate on capital will cause the aggregate expenditure curve to shift up and the aggregate demand curve to shift to the left, all else constant. True You Answered False Correct Answer 1 / 1 pts Question 42 One reason that the aggregate demand curve slopes downward is that when prices rise, say in the US, the relative price of imports fall and thus, US citizens substitute away from domestically produced goods toward imported goods and thus, GDP in the US will fall (all else constant). True Correct! False 1 / 1 pts Question 43 Suppose the value of the US dollar changes from $1 = 1.2 euros to $1 = 1.30 euros. This being the case, imports from the US to Europe, have become more expensive to European citizens, all else constant.