27)A decrease in real GDP

Select one:

a.decreases the demand for money because there are fewer goods and services to purchase

b.increases the demand for money because there are fewer goods and services to purchase

c.increases the demand for money because of lower inflation that follows decrease in real GDP

d.has no effect on the demand for money

28) Monetary policy primarily affects macroeconomic equilibrium in the economy by

Select one:

a.changing the Short-Run Aggregate Supply

b.changing the Aggregate Demand

c.changing the Long-Run Aggregate Supply

d.Changing both the Aggregate Demand and Long-Run Aggregate Supply

29) The crowing out effect of government spending will be less pronounced if

Select one:

a.none of the answers is correct

b.consumption spending is more sensitive to changes in the interest rate

c.government borrows mostly in the international financial markets

d.equilibrium GDP is further below potential GDP

30) The current account deficit can decrease because of

Select one:

a.decrease in the amount of income going to foreigners who own investments in the coutnry

b.A decrease in exports

c.An increase in imports

d.all answers are correct

31) An Australian firm produces software in the UK, its market value will be included in

Select one:

a.Both Australia's and UK's GDP

b.Australia's GDP.

c.the UK's GDP.

d.neither Australia's nor UK's GDP as it is counted towards National Product