Which one of the following variables is not heldconstant along a given aggregate demand curve?
| A. | expectations about inflation |
| B. | the exchange rate |
| C. | the price level |
| D. | fiscal policy |
Everything else remaining the same, an increase in the interestrate increases saving and
| A. | decreases aggregate demand through the intertemporalsubstitution effect. |
| B. | increases aggregate demand through the intertemporalsubstitution effect. |
| C. | increases aggregate demand through the internationalsubstitution effect. |
| D. | increases aggregate demand through the wealth effect. |
Discretionary fiscal policy is risky because it is hamperedby
| A. | recognition lag, impact lag, and law-making lag. |
| B. | recognition lag, inflation lag, and law-making lag. |
| C. | recognition lag, impact lag, and business cycle lag. |
| D. | recognition lag, business cycle lag, and law-making lag. |
Foreign exchange dealers expect the Canadian dollar next year toappreciate against all currencies. What is the effect on thequantity of real GDP demanded or aggregate demand inCanada?      Â
| A. | Canadian aggregate demand decreases. |
| B. | Canadian aggregate demand increases. |
| C. | The quantity of Canadian real GDP demanded decreases. |
| D. | The quantity of Canadian real GDP demanded increases. |
