35. When economy is at its peak level, we are more likely to experience which of the below stages in business cycle

a. Inflationary gap

b. Recessionary gap

c. Unemployment rate is greater than natural rate

d. Expansion

36. When unemployment rate is below natural rate, which of below policy is more likely to be implemented?

a. Increasing government spending

b. Decreasing income taxes

c. Decreasing government spending

d. Lower target overnight rate

37. When economic equilibrium excess its potential output level, which of below policy is more likely to be implemented?

a.

Expansionary monetary policy

b.

Contractionary monetary policy

c.

Expansionary fiscal policy

38.

When BoC buys bond in secondary market, how will the money supply change?

a.

Money supply will stay the same

b.

Money supply will decrease

c.

Money supply will increase

39. Contraction is very likely to be caused by

a.

increasing AD

b.

decreasing AD

c.

AD stays the same

40. Which of below is correct description regarding average fixed cost?

a.

Average fixed cost (if exits) will be the line above average cost

b.

Average fixed cost (if exits) will be the line same as revenue

c.

Average fixed cost (if exits) will be the line same as marginal cost

d.

Average fixed cost (if exits) will be the line below average variable cost

e.

Average fixed cost (if exits) will be the line in-between average variable cost and average total cost