1. If inflation means a rise in the average level of all prices, disinflation refers to:

a. Acceleration in the rate of inflation

b. Maintaining the same rate of inflation for three consecutive time periods.

c. Reduction in the rate of inflation.

d. All of the above.

2. Monetary validation consists of:

a. The moral suasion capability of the Central Bank Governor.

b. Monetary policy counter cyclical measures such as monetary expansion counter acting a recessionary gap.

c. Monetary policy reinforcing an existing business cycle stage such as monetary expansion supporting an inflationary gap.

d. None of the above

3. The theory that "bad" or debase money drives "good" or debased money out of circulation:

a. Quantity Theory of Money

b. Gresham's Law

c. Fiat Money Theory

d. None of the above

4. NICs in international development refer to:

a. Newly Industrialized Countries

b. Non-Importing Countries

c. New International Conventions

d. None of the above

5. NAIRU refers to:

a. Non-Accelerating Interest Rate of Unemployment

b. Cyclical Unemployment

c. Non-Accelerating Inflation Rate of Unemployment

d. None of the above

6. Import quotas refer to:

a. Tariffs on imports

b. Restrictions on the quantity of a foreign product that may be imported:

c. New Trade Bonds

d. None of the above

7. Trade deficits can be described as:

a. Exports > Imports

b. Imports > Exports

c. Exports = Imports

d. All of the above

8. A recession is:

a. A decline in GDP.

b. A phase in the business cycle

c. Its lowest point is the trough

d. All of the above

9. This is one of the 4 key economic problems that is specifically concerned with the allocation of scarce resources among alternative uses:

a. What is Produced and How?

b. What is Consumed and by Whom?

c. Why are Resources Sometimes Idle?

d. Is Productive Capacity Growing?

10. A main development strategy for developing countries in 1945 - early 1980s is or characterized as:

a. Inward looking

b. Interventionist

c. Import substitution

d. All of the above.

11. A tariff as a method of protection in international trade is:

a. A tax applied on exports of goods or services.

b. A tax applied on imports of goods or services.

c. A tax on debt service payments.

d. None of the above

12. This refers to the government's shortfall of current revenue below current expenditure.

a. Debt

b. Budget Deficit

c. Debt service payments

d. All of the above.

13. The main accounts of the BOP include the Current Account and:

a. Capital Account

b. Statistical Discrepancy Account

c. Transfer Payments

d. None of the above.

14. The cost to the economy in the process of disinflation is the following:

a. trade protection

b. loss of output

c. high interest rates

d. All of the above

15. If Marginal Propensity to Spend is 0.8, a $1 billion increase to autonomous expenditure leads to ___ billion increase in equilibrium national income.

a. $1

b. $2

c. $5

d. $7

16. The higher the GDP growth,:

a. The higher the Marginal Propensity to Import.

b. The lower the Marginal Propensity to Import.

c. There is no change in the Marginal Propensity to Import.

d. All of the above.

17. A generalization that can be made about the pattern of global development of the past decades:

a. Inequality of income distribution

b. Uneveness

c. Average per capita incomes has grown

d. All of the above

18. The Washington Consensus model advocates for:

a. More active government intervention in the development of the economy.

b. More subsidies to develop promising industries.

c. Deregulation to develop the economy.

d. All of the above.

19. The fraction of its deposits that a commercial bank actually holds as reserves:

a. Target reserve ratio

b. Reserve Ratio

c. Excess Reserves

d. None of the above.

20. Aggregate supply shocks (that affects levels of supply) will cause the price level to:

a. Change in opposite directions.

b. Be unchanged.

c. Change in the same direction.

d. None of the above