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SECTION A. (7.5 MARKS) Each of these statements is true or false? Explain the reason. Question 1: (1.5 marks) To help the economy to recover

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SECTION A. (7.5 MARKS) Each of these statements is true or false? Explain the reason. Question 1: (1.5 marks) To help the economy to recover from the depression in the pandemic, State Bank of Vietnam increases the money supply. Thus, its price level increases and its currency (VND) depreciates against USD. Question 2: (1.5 marks) A country has a trade deficit. As a consequence, its domestic investment is larger than saving. Question 3: (1.5 marks) Since the boom of Covid-19 epidemic, many Vietnamese people have poured their money in the stock market to seek profit. In the perspective of economics, this activity is considered as investment. Question 4: (1.5 marks) The value of the goods and services produced in Vietnam by Uniqlo - a Japanese fashion company are counted in Japan GDP. Question 5: (1.5 marks) If the Central Bank wants to use the monetary policy to increase the aggregate demand, they will make open market purchases, lower the required reserve ratio and lower the discount rate. SECTION B: CASE STUDY (2.5 MARKS) According to CNBC, world oil prices are currently at their highest level in recent years due to the limited supply and the increasing demand when economies reopen after the Covid- 19 epidemic. This fact has caused many countries to suffer high inflation. 1. Explain this phenomenon by using AD-AS model. (1 mark) 2. In your opinion, to cut down on the escalating inflation rate, which kind of monetary policy should countries' Central Bank apply? (0.5 marks) 3. Analyze its impacts on stabilizing the price level if Central Banks adopt this policy (1 mark)

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