MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 21) 21) "Demand-pull inflation" refers to A) any inflation that is originally caused by a rightward shift of the AD curve but is maintained at a constant level by monetary validation. B) only the inflation that results from an expansionary monetary policy. C) any inflation that is originally caused by a rightward shift of the AD curve but is accelerating due to monetary validation. D) the inflation that results from a decrease in net exports. E) the inflation that results from any inflationary gap caused by a rightward shift of the AD curve. 22) 22) "Cost-push inflation" refers to A) the increase in the price level that occurs when the excess demand for inputs pushes up input costs. B) the increase in the price level that occurs when there is excess supply of factors of production. C) inflation arising from a shortage of labour. D) any increase in the price level that results from an upward shift of the AD curve. E) inflation arising from a leftward shift of the AS curve that is not the result of excess demand for factors of production. TANSWER. Write the word or phrase that best completes each statement or answers the question. 23) 23) Extremely high inflation is called PLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 24) 4) Transfer payments are excluded from the calculation of GDP because A) it is difficult to assess the market value of a transfer payment. B) they do not represent the purchase of a good or a service. C) they do not generate additional income in the economy. D) they are small enough to ignore when computing the national accounts. E) ey are nut counted as income by any economic agent. 2) Suppose that the nominal natonal income in e cntry inc dby 30 p duning the year, when indlation was 5 peecent Theeone the mal CP A) fell by 10 pront ) Sell by 5 peromt was unaffected D) rose by 5 penoent rose by 10 percent 26) When a govemment changes its fiscal policy, it is A) buying and selling private bonds to increase or decrease the ovenight lending rate. B) changing tax rates to change national income C) increasing the money supply to increase national income. b) using govermment spending and taxes together with changing the money supply in order to achieve fall employment E) changing govemment spending and/or tax rates to change national income 26) SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 27) A provincial government introduces a new tax benefit for single mothers. This is 27) an example of fiscal policy. MULTIPLE CHOICE, Choose the one alternative that best completes the statement or answers the question. 28) Any central bank, including the Bank of Canada, can implement its monetary policy by directly influencing either A) aggregate demand; the interest rate. B) aggregate supply; aggregate demand. C) the price level; the interest rate. D) money supply; money demand. E) the money supply; the interest rate. 28) or 29) In practice, the Bank of Canada implements its monetary policy by A) directly influencing the excess reserves in the commercial banking system. B) influencing the slope of the money demand curve. C) setting the money supply. D) directly influencing the price level. E) directly influencing the overnight interest rate. 29) 30) If the Bank of Canada chooses to expand the money supply directly, it could A) sell some of its foreign currency assets. B) change the price level. C) reduce its deposits at commercial banks. D) sell govemment securities on the open market. E) buy government securities on the open market. 30)