Section A.

True or False questions. Provide economic intuition or draw relevant diagrams to justify your answers, explain your answers.

1. Financial innovations in the form of a cryptocurrency reduces the money multiplier and money supply.

2. Services offered in the sharing (or sometimes referred to as the Gig) economy, such as Uber eats, Uber rides, and Air BnB, should not be counted in a country's GDP because no actual physical goods are produced.

3. A contractionary monetary policy in the US to combat rising inflation can result in an appreciation of the Australian dollar against the USD.

Section B.

4. Evaluate the following statement in the form of a short essay. You need to cite any references used to support your arguments. "The quantity theory of money fails to explain the global inflation phenomenon that we observed in the post?pandemic (i.e., early 2022)."

5. Consider an economy that is characterized by the following equations: