The asset demand for money is related to which function of money? A) standard of deferred payment B) store of value C) medium of exchange D) unit of accounting ANSWER B
Date: September 2nd, 2020
Consider two economies with the same GDP per capita: Barylia and Lithasia. The savings rate in Barylia is 20% while the savings rate in Lithasia is 60%. a. Which of these two countries is likely to accumulate capital faster? b. The government in Barylia decides to provide incentive to its citizens to increase the savings […]
Date: September 2nd, 2020
What is the real-balance effect of an increase in the price level? What will be an ideal response? ANSWER The real-balance effect is the change in the real value of the money balances when the price level changes, all other things constant. An increase in the price level means that the purchasing power of […]
Date: September 2nd, 2020
Assuming all else equal, if there is an increase in the real interest rate: A) there will be an upward movement along the credit demand curve. B) there will be a downward movement along the credit demand curve. C) the credit demand curve shifts to the right. D) the credit demand curve shifts to the […]
Date: September 2nd, 2020
Which of the following statements is true of the U.S. economy before 1800? A) The U.S. economy was growing at an average rate of more than 6% per annum. B) There were no major achievements in arts. C) Sustained economic growth was rare or absent in the U.S. economy. D) There were no major achievements […]
Date: September 2nd, 2020
If a number equal to the mean of a series of observations is added to the series, the new mean is: A) smaller than the original mean. B) greater than the original mean. C) same as the original mean. D) either greater or smaller than the original mean depending on the number of observations in […]
Date: September 2nd, 2020
Assuming all else equal, if the real interest rate increases, it will lead to: A) a decrease in the quantity of credit demanded by a firm. B) a rightward shift of the credit demand curve of a firm. C) a leftward shift of the credit demand curve of a firm. D) an increase in the […]
Date: September 2nd, 2020
Consider two countries: A and B. Assume that both countries are exactly similar until the year 2000. At the beginning of year 2000, both countries decide to change their strategy for economic growth. Country A plans to encourage immigration and increase human capital in the economy to achieve sustained growth, while Country B decides to […]
Date: September 2nd, 2020
What information is provided by the aggregate demand curve? What will be an ideal response? ANSWER The aggregate demand curve relates total planned real expenditures to each price level. The price level is measured by the GDP deflator. The lower is the price level, the higher are total planned real expenditures, other things being […]
Date: September 2nd, 2020
The average price of ten commodities is $330. If an eleventh commodity whose price is $600 is included in the calculation, the new average is: A) $330.35. B) $450.25. C) $354.54. D) $254.54. ANSWER C
Date: September 2nd, 2020
