1.The money demand curve illustrates the negative relationship between quantity demandedofmoney and interest rate because

a)the law of demand holds.

b)interest rate can be viewed as the opportunity costs of holding money.

c)people will hold more money in hands when the interest rate is high.

d)the Federal Bank can control the money demand.

2.The following table shows the real GDP and the CPI for an economy:

Year 2018 2019

CPI 100 105

Real GDP $5.0 trillion $4.8 trillion

The inflation rate and the economic growth rate in 2019 are

a)5.0% and 2.0%.

b)5.0% and 4.0%.

c)5.0% and 4.0%.

d)4.7% and 4.2%.

3.Automobile workers in Detroit who are unemployed because of foreign automobile imports. At the same time, job vacancies exist for coal miners in West Virginia would most likely be classified as

a)structurally unemployed.

b)cyclically unemployed.

c)frictionally unemployed.

d)seasonally unemployed.

4.A monopolist will be able to enjoy economic profits in the long run because of:

a)Barriers to entry.

b)The monopolist's market power.

c)Economies of scale.

d)The monopolist's ability to sell as much as it produces at the market price.

5.John Keynes argued that the level of real GDP output is primarily determined by

a)Aggregate demand.

b)Aggregate supply.

c)Money supply.

d)Interest rates.

6.In the AD-AS model, assume that an economy's aggregate demand, denoted by Q_D=400P, and SR aggregate supply, denoted by Q_S=P, currently intersect at price level = $200 and the full employment output level = 200. What curve would have shifted if a new short-run equilibrium were to occur at an output level of 300 and a price level of $300?

a)SRAS shifts rightward.

b)SRAS shifts leftward.

c)AD shifts rightward.

d)AD shifts leftward.

7.For circulation, the commodity value of coins is generally less than their face value because

a)the Government has insufficient gold to support the issued coins.

b)people will collect coins if their commodity value is higher or equal to their face value.

c)coins are only good for cash transaction.

d)the weight of coins cannot be too high.

8.Without the government intervention, which of the following macroeconomic indicators has no clear trend in business cycle?

a)Government deficit

b)Inflation rate

c)Economic growth rate

d)Unemployment rate

9.The ultimate goal of macroeconomic policy is to

a)stimulate the economic growth rate as high as possible.

b)maintain a stable positive economic growth rate with a consistent low inflation rate.

c)stabilize the inflation rate as zero.

d)lower the unemployment rate to be zero.

10.In the AD-AS model, assume that an economy's aggregate demand, denoted by Q_D=400-P, and SR aggregate supply, denoted by Q_S=P, currently intersect at price level = $200 and the full employment output level = 200. Which of the following event is most likely to explain a new LONG-RUN equilibrium occurring at an output level of 300 and a price level of $100?

a)Price of crude oil falls.

b)The currency of Country X depreciates.

c)Tax rate increases in Country X.

d)Technology improvement.