carman3232003

Ans the questions and explain
1.Which of the following can explain why the aggregate demand curve is downward sloping?
A. When the price level rises, people’s consumption expenditure will increase.
B. According to the law of demand, people will consume less when the price level increases.
C. According to the law of demand, people will consume fewer locally produced goods when the domestic price level rises relative to the international price level.
D. When the price level rises, real profits will decrease. As a result, businesspeople will reduce their investment.

2.Refer to the following table and answer the question:
                                                                            billion $
Total issue of legal tender                                       6
Cash reserves held by the banking system            2
Demand deposits                                                    5
Deposits with licensed banks                                11
Negotiable certificates of deposit issued by licensed banks and held by the public  3
Deposits with restricted licence banks and deposit-taking companies                       4

The money supply M1 and M2 are __________ and __________, respectively.
A. $6 billion; $25 billion
B. $9 billion; $18 billion
C. $9 billion; $23 billion
D. $11 billion; $25 billion

3.If there is an inflationary gap, which of the following monetary policies CANNOT close the gap?
(1) The central bank buys bonds from the market.
(2) The central bank lowers the discount rate.
(3) The central bank prints fewer new banknotes than before.
A. (3) only
B. (1) and (2) only
C. (2) and (3) only
D. All of the above

4.The table below shows the output of two goods in Country A and Country B with 1 unit of resources:
                                     Good X (units)            Good Y (units)
                                                6            OR            8
Country A
Country B                                2            OR            3

Which of the following statements is correct?
A. If the transport cost per unit of Good X is greater than 0.15 units of Good Y, there will be no trade in Good X between the two countries.
B. Country A can gain from trading with Country B.
C. Country A has a comparative advantage in the production of both goods.
D. Country A will specialise in producing Good Y

[ 本帖最後由 carman3232003 於 2014-3-5 08:13 PM 編輯 ]

carman3232003

carman3232003

williamEX

1) D2) C
3) A
4) B