INSTURCTION
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1. Which of the following best distinguishes fiscal policy from monetary policy?
2. Which of the following is caused by deficiency in demand in an economy?
3. An economy that experiences both inflationary pressures and import penetration is said to be experiencing
4.. Which of the following is not a component of investment expenditure in an economy?
5. Which of the following would increase the value of the simple spending multiplier?
6. Which of following will occur when there is a reduction in any of the injections?
7. Which of the following will occur as a result of an improvement in technology?
Indicate whether the following statements are True/False
8. National wealth is a stock concept which represents all of the physical assets or things that have value and are owned by citizens of a country.
9. The progressive tax system favors low income earners than the regressive tax system.
10. The long run aggregate supply curve shows the relationship between price and nominal GDP.
11. Monetary policy involving an increase in the money supply would lead to a ....... in the LM curve.
12. Suppose an individual has GHC 135,000 as his annual salary and he intends to spend GHC 100,000. There has been a legislation to increase salaries, and as a result, he now has an annual income of GHC 150,000. In view of that, if he intends to spend GHC 105,000. What would be his marginal propensity to save?
13. The particular combination of real GDP and the interest rate at which the goods and money market are in equilibrium represent....
14. Budget deficit that last over a complete business cycle is known as ....
15. Which of the following is/are merit good(s)?
I. Defense Service
II. Sanitation
III. Health
IV. Water
16. Which of the following best describes crowding out?
17. When the level of aggregate demand in the economy and hence economic activity is left unaltered by budgetary policy, it is termed
Use the following case to answer questions 18 to 20
In a closed economy, autonomous consumption is given by Co = 200 and the marginal propensity to save is mps = 0.2. Investment and government spending are both 300.
18. What is the level of output in the economy?
19. What is the government multiplier?
20. What is the level of consumption and savings in the economy respectively?
