1.19. A decrease in the price level will 

A shift the AS curve to the left. 

B. shift the AS curve to the right. 

C. shift the AD curve to the left. 

D. shift the AD curve to the right. 

E. leave both the AD curve and the AS curve unchanged. 

1.20 If inflation was 10% in a particular year and you received a 20% increase in income during the same year, then over the year your: 

1. A real and nominal income both fell. 

2. real and nominal income both rose. 

3. real income fell, but nominal income rose. 

4. real income rose, but nominal income fell. 

5. nominal income rose, but real income was unchanged. 

Question 2

Define the following economic concepts: 

 2.1.

 The Consumer Price Index (CPI)

 2.2. Lorenz-curve.

 2.3. Money.

 2.4. Nationalisation.

 2.5

 Fiscal policy.

 2.5. Inflation.

 2.6.

 Stagflation.

 2.7

 Gross Domestic Product