Reducing personal income tax rates is an example of fiscal policy.

A. True

B. False

Expansionary fiscal policy is carried out to overcome unemployment.

A. True

B. False

Decreased government expenditure and increased taxes are part of a contractionary fiscal policy.

A. True

B. False

Government expenditure is a monetary instrument.

A. True

B. False

If foreign firms decide to make foreign direct investments in Malaysia, they have to offer foreign currencies to sell in Ringgit Malaysia.

A. True

B. False

The foreign exchange rate is determined based on interactions between money demand and supply.

A. True

B. False

Fiscal policy refers to taxation and spending policies implemented by government.

A. True

B. False

According to the theory of comparative advantage, countries gain from trade because world output rises when each country specializes in what it does relatively best.

A. True

B. False

Increasing the reserve ration can reduce money supply.

A. True

B. False

China produces 1,600 bales of cotton and 3,200 meters of cloth while Indonesia produces 1,200 bales of cotton and 800 meters of cloth. This means that Indonesia has a lower opportunity cost in producing cloth as compared to China.

A. True

B. False

Countries that engage in international trade tend to manufacture products of which there is a demand in the global economy.

A. True

B. False

Contractionary fiscal policy can be carried out by increasing government expenditure.

A. True

B. False

Depreciation of the Malaysian Ringgit tends to decrease prices of exported goods in Malaysia.

A. True

B. False

Appreciation of the Malaysian Ringgit tends to decrease the prices of imported goods in Malaysia.

A. True

B. False