ANSWER KEY ONLY THANKS

1.How could the central bank encourage banks to lend out more of their reserves?

A.reduce the required reserve ratio

B.increase the required reserve ratio

C.reduce money supply

D.central bank sells more government bonds

2.Which of the following is primarliy responsible for control of the money supply?

A.the control of foreign exchange rate.

B.the control of government expenditure.

C.open market operation.

D.the changes in income and business tax.

3.If the central bank aims to close an inflationary gap and push the economy towards full employment, then the central bank has to

A.increase the supply of money, reduce interest rate in order to increase C and I.

B.increase the demand for money and interest rate in order to reduce C and I.

C.decrease the demand for money and interest rate in order to increase C and I.

D.decrease the supply of money, increase interest rate in order to reduce C and I.

4.Given that County X labor force is 20m and the number of employed is 19.1m, then its unemployment rate is

A.4.5%.

B.95.5%.

C.20%.

D.0.9%.

5."When Country X experienced demand-pull inflation, this means that there is "

A.a rise in the price level but a fall in real GDP.

B.a rise in the price level and real GDP.

C.a fall in the price level and real GDP.

D.a fall in the price level but a rise in real GDP.

6.Unemployment caused by a fall in aggregate demand in a recession is known as

A.Structural unemployment.

B.Cyclical unemployment.

C.Frictional unemployment.

D.Seasonal unemployment.

7.A rise in wealth will

A.increase AD and lead to cost-push inflation.

B.reduce SAS and lead to cost-push inflation.

C.increase AD and lead to demand-pull inflation.

D.increase SAS and lead to demand-pull inflation.

8.A country that has a large real GDP per person may not necessarily has a high level of economic welfare because it may have

A.low population rate.

B.low real GDP growth rate.

C.low inflation rate.

D.environmental problems.

9.Real GDP measures GDP using the

A.real GDP per capita.

B.base-year price.

C.current year price.

D.inflation rate.

10.Which of the following relationship is wrong?

Y = C + I + G + (X - M)

Y = C + I + G + (M - X)

S = Yd - C

Y = Wages + Rental Income + Interests Income + Profit