Macroecnomics 2

The idea of government intervention to help in a financial crisis was proposed by which economist?

• Keynes

• Maslow

• Friedman

• Adam Smith

Which is not a function of Central bank?

• To be a banker to other bank

• To promote monetary stability and a financial structure

• To import the printing of currency

• Be a holder of the country's stock of gold and foreign currency reserves.

Which is the instrument of monetary policy?

• Taxes

• Government Expenditure

• Income received from households

• Legal cash reserve requirement

Equilibrium in macroeconomics refers to ___.

• total value of output being produced more than total value of expenditure.

• aggregate supply being greater than aggregate demand

• aggregate demand being greater than aggregate supply

• aggregate demand being equal to aggregate supply

The ____ slopes upwards because higher price levels will raise domestic output.

• aggregate demand curve

• aggregate supply curve

• demand curve

• none of the above

Government policies regarding taxes and expenditures are called ___.

• fiscal policies

• growth policies

• monetary policies

• supply side policies

Which of the following is the most appropriate fiscal policy for recession?

• Decreases in government spending

• Increases in interest rate

• Decreases in tax rate

• Increases in tax rate

The effect of expansionary monetary policy is a /n___.

• increase in interest rate

• decrease in interest rate

• increase in government spending

• decrease in government spending

The effect of expansionary monetary policy is a /n___.

• increase in interest rate

• decrease in interest rate

• increase in government spending

• decrease in government spending

An economy is in macroeconomic equilibrium. If Y = 200, C =100, I =30, G=40 and M =30, what is the value of exports?

• 60

• 40

• 90

• 80