Ture / Fals

1. More inflation is likely to result when the government enacts policies to maintain full employment when there is cost-push inflation.
2. When chartered banks borrow from the Bank of Canada, they decrease their excess reserves and their money-creating potential.
3. Based on the long-run Phillips Curve, any particular rate of inflation is compatible in the long run with the natural rate of unemployment.
4. An expansionary monetary policy will decrease net exports.

The following table shows the balance of payments statement of Transylvania for 2013. All the figures are in billions of dollars.

1. The following table shows the balance of payments statement of Transylvania for 2013. All the figures are in billions of dollars.

Merchandise exports$+15

Merchandise imports17

Service exports+5

Service imports2

Net investment income5

Net transfers+4

Capital inflows+5

Capital outflows11

Official international reserves+1

Refer to the above data. In 2013, Transylvania had a $2 billion balance oftradesurplus.

1. If the price of British pounds, measured in terms of Canadian dollars is rising then, the price of Canadian dollars, measured in terms of British pounds, is also rising.
2. The price of a bond with no expiration date is $1,000 and the fixed annual interest payment is $100. If the price of the bond falls to $800, the interest rate to a new buyer of the bond is now 8.5 percent.