Question:The key deterrent of wage flexibility are the frictions in the labor market. Select one:

True False

Question The direct effect of COVID19 on any economy would be reduced capital productivity. Select one: True False

Question Inflation expectations guide the stance of monetary policy in the short run. Select one: True False

Question 8 The short run aggregate supply can be understood using Phillips curve. Select one: True False

Question 9: If CF = CF0+0.25(id, if), was can say that CF0 is the value of foreign investment. Select one: True False

Question 10 In small Pacific Island economies (like Kiribati), monetary policy works best. Select one: True False

Question 11 Tourism was the largest foreign exchange earner for Fiji in 2020. Select one: True False

Question 12 Fiji government's debt remains manageable in 2021. Select one: True False

Question 13 In the Keynesian world, an expansionary fiscal policy would always crowd-out private investment, if monetary policy not

accommodative. Select one: True False

Question 14 In a liquidity trap situation, monetary policy is totally ineffective. Select one: True False

Question 15 When LM = 0.5Y-50i (where Y = 5000, i= 5%), the real money supply should be 2250. Select one: True False

Question 16 The AD curve is a locus of points of simultaneous equilibria of goods and money markets. Select one: True False

Question 17 In a flexible exchange rate system, with perfect capital mobility, a devaluation will increase GDP but interest rate will remain unchanged. Select one: True False

Question 18 The biggest policy challenge for most countries now is managing economic contraction. Select one: True False

Question 19 COVID19 crisis has reduced trade to/from the Pacific region. Select one: True False

Question 20 The following are constraints for economic development in Samoa: subsistence agriculture, limited tourism and lack of domestic private investment. Select one: True False

Question 21 If I = I0-bi, then the value of b will determine the impact of monetary policy on investment. Select one: True False

Question 22 In order to reduce market interest rate, the central bank conducts open market sale of bonds. Select one: True False

Question 23 Under perfect capital mobility, interest rates (id, if) can permanently vary, if monetary policy is tightened. Select one: True False

Question 24 The degree of capital mobility could be impacted by differences in income tax regimes. Select one: True False

Question 25 A fixed exchange rate is best for small economies like Fiji, at least during the COVID19 crisis Select one: True False

Question 26 A devaluation can cause inflation and lead to a raise in external debt. Select one: True False

Question 27 A BOP surplus will increase foreign reserves is the domestic economy operates under flexible exchange rate system. Select one: True False

Question 28 If nominal GDP was 1500 and real was 1450, the implicit GDP deflator would imply a moderate rate of inflation of about 3%. Select one: True False

Question 29 If the goods market equilibrium was Y = 2500-50i, and government expenditure was increased by 50, a possible new IS curve would be Y = 2750-50i, provided G was 2.5. Select one: True False

Question 30 In 2020, the expected decline in GDP growth was -19% for Fiji. Select one: True False

Question 31 The aggregate expenditure multiplier in ADAS is larger than that of the ISLM model. Select one: True False

Question 32 The markets involved in IS-LM are goods and money markets Select one: True False

Question 33 The rate of interest (i) is determined in the bonds market Select one: True False

Question 34 A possible expression that can model government spending is G = Gt-1 where (t) is current year. Select one: True False

Question 35 A devaluation will improve current account balance sustainably in the long-run Select one: True False

Question 36 text As foreign prices raise, we expect domestic exports to increase; and if domestic prices raise, the exports to decline Select one: True False

Question 37 Lack of technology, limited range of processed products, trade costs and supply inconsistency are major problems for Fiji (or Pacific) economies trade performance. Select one: True False

Question 38 If income elasticity of Fiji's exports are high, a fall in the quality of Fijian goods will drastically reduce Fiji's trade balance. Select one: True False

Question 39 In a typical fixed exchange rate system, the money supply is less independently controlled by the central bank. Select one: True False

Question 40 Despite different last-two digits of yours and your friend's ID numbers, if IS = 20XX-150i and LM = 5XX+20i, the value if i and Y will be same if both XX stands for the last two digits of any one's number. Select one: True False