Economics 1 or 2 lines explanation needed per MCQ. It can have more than one correct answer. PART 1. Which of the following are true about the nominal interest rate, i? There may be more than one answer. a) In the short-run, i is determined by the IS-LM system. b) In the long-run, i is determined by the IS-LM system. c) If expected inflation π^e drops, i must drop in the short-run. d) If expected inflation π^e rises, i must rise in the long-run PART 2. Which of the following are true about real and nominal demand? There may be more than one answer. a) A rise in the demand for real balances (Md/P) raises equilibrium prices in the short-run. b) A drop in the demand for nominal balances (Md) reduces equilibrium prices in the long-run. c) A change in government purchases can affect aggregate demand in the long-run. d) A change in government purchases can affect aggregate demand in the short-run. PART 3. Which of the following are true about wages? There may be more than one answer. a) Nominal wages, W, are only affected by the CB’s money supply policy. b) The real wage, W/P remains unchanged regardless of changes in the money supply. c) Nominal wages, W, must always be proportionate to the price level P. d). We cannot determine W/P without information on the government’s tax policy T. PART 4. Which of the following affects this year’s GDP? There may be more than one answer. a) The government decides to hand out more money to the poor. b) The government decides to raise health workers’ salaries. c) The parliament decides to freeze their own salaries. d) You volunteer as a vaccine provider. PART 5. Which of the following are true about money? There may be more than one answer. a) Your checking account is included in the money supply. b) My pension fund is included in the money supply. c) Bitcoins are part of the money supply. d) The value of fiat money is determined by how expensive it was to print/mint it.
Economics
1 or 2 lines explanation needed per MCQ. It can have more than one correct answer.
PART 1. Which of the following are true about the nominal interest rate, i? There may be more than one answer.
a) In the short-run, i is determined by the IS-LM system.
b) In the long-run, i is determined by the IS-LM system.
c) If expected inflation π^e drops, i must drop in the short-run.
d) If expected inflation π^e rises, i must rise in the long-run
PART 2. Which of the following are true about real and nominal
a) A rise in the demand for real balances (Md/P) raises
b) A drop in the demand for nominal balances (Md) reduces equilibrium prices in the long-run.
c) A change in government purchases can affect aggregate demand in the long-run.
d) A change in government purchases can affect aggregate demand in the short-run.
PART 3. Which of the following are true about wages? There may be more than one answer.
a) Nominal wages, W, are only affected by the CB’s money supply policy.
b) The real wage, W/P remains unchanged regardless of changes in the money supply.
c) Nominal wages, W, must always be proportionate to the
d). We cannot determine W/P without information on the government’s tax policy T.
PART 4. Which of the following affects this year’s
a) The government decides to hand out more money to the poor.
b) The government decides to raise health workers’ salaries.
c) The parliament decides to freeze their own salaries.
d) You volunteer as a vaccine provider.
PART 5. Which of the following are true about money? There may be more than one answer.
a) Your checking account is included in the money supply.
b) My pension fund is included in the money supply.
c) Bitcoins are part of the money supply.
d) The value of fiat money is determined by how expensive it was to print/mint it.
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