Topic 1 - 4
Economic Activity Quiz
Test your knowledge of economic concepts and theories with this engaging quiz! Covering topics from inflation rates to fiscal policies, this quiz is designed for anyone interested in understanding the dynamics of economic activity.
Questions include:
- Short run contractions and expansions
- Impact of taxes on consumption
- Money supply and interest rates
The number of unemployed divided by the labor force equals the labor force participation rate
True
False
If nominal GDP for 2009 is $6400 billion and real GDP for 2010 is $6720 billion (in 2009 dollars), then the growth rate of real GDP is ?
An increase in taxes will increase the disposable income and decrease the consumption
True
False
An increase of one unit in government spending leads to an increase of one unit in equilibrium output.
True
False
Suppose the economy is characterized by the following behavioral equations: C = c0 + c1(Yd); Yd = Y - T; I = b0 + b1(Y) ; Government spending and taxes are constant. Multiplier is equal to 1/(1 - c1)
True
False
Assume that central bank is not targeting interest rate and there is a decrease in the money supply. As a result, interest rate will decrease and output will increase
True
False
How central bank increase money supply?
Suppose that the money demand, Md = $Y(0.15 – i) and the nominal income, $Y is RM3000.What money supply must the central bank provide to achieve its interest rate target of 3%?
Assume there is interest rate targeting. Suppose there is a simultaneous decrease in the money supply and increase in government spending. The relative size of the effects of monetary contraction policy on output is greater than the relative size of the effects of fiscal expansion policy on output. As a result, output will decrease.
True
False
Money demand is downward sloping because there is negative relationship between money and output
True
False
A fiscal consolidation will decrease output and increase the interest rate. Assume that there is not targeting interest rate
True
False
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