ANSWER KEY ONLY THANKS

1. fall in the price level will

A.increase demand for money and interest rate.

B.decrease demand for money but increase interest rate.

C.decrease demand for money and interest rate.

D.decrease supply of money but increase interest rate.

2.If the required reserve ratio is 20% and the initial deposit is $50,000, then the amount of new money created will be

A.$200,000.

B.$10,000.

C.$250,000.

D.$1,000,000.

3.If the required reserve ratio is 5%, then the money multiplier is

A.1.05.

B.95%.

C.20.

D.2.

4.A fall in the price level will

A.increase demand for money and shift the Md curve to the right.

B.increase money supply and shifts the Ms curve to the right.

C.reduce the demand for money and shifts the Md curve to the right.

D.reduce the demand for money and shifts the Md curve to the left.

5.A rise in interest rate is caused by

A.a rise in the supply of money.

B.a fall in real GDP.

C.a fall in the price level.

D.a rise in the price level.

6.A fall in domestic country interest rate relative to the rest of the world interest rates will

A.increase the demand of domestic currency.

B.decrease the supply of domestic currency.

C.increase the supply of domestic currency.

D.decrease the demand of domestic currency.

7.The fall in the price of Singapore produced goods relative to the price of foreign produced goods will

A.increase the demand for S$ and depreciate S$.

B.increase the demand for S$ and appreciate S$.

C.increase the supply of S$ and deprecaite S$.

D.decrease the supply of S$ and appreciate S$.

8.A fall in domestic country real GDP will

A.increase import and the supply of domestic currency.

B.decrease import and the supply of domestic currency.

C.increase export and the demand for domestic currency.

D.decrease export and the demand for domestic currency.

9."If the price of domestic good falls and it is now relatively cheaper compared to foreign goods, this will ________________ ."

increase the demand for domestic currency and caused domestic currency to appreciate.

increase the demand for domestic currency and caused the domestic currency to depreciate.

increae the supply of domestic currency and caused the domestic currency to depreciate.

decrease the supply of domestic currency and caused the domestic currency to appreciate.

10.To reduce inflation rate, the central bank should

A.sell government bonds and increase required reserve ratio.

B.buy government bonds and increase required reserve ratio.

C.sell government bonds and decrease required reserve ratio.

D.sell government bonds and decrease discount rate.