INSTURCTION
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SECTION B
1. In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to shift the
2. Which of the following statements is true regarding the long run aggregate supply curve? The long run aggregate supply curve
3. According to the model of aggregate demand and aggregate supply, in the long run, an increase in the money supply should cause prices and output to ....
4. The investment and saving line in the IS-LM model connects...
5. The liquidity and money (LM) curve has ...
6. If policymakers expand aggregate demand, then in the long run
7. Policies put in place to boost Aggregate Demand will be more successful if ....
8. Each of the following is a reason why international trade has expanded in recent decades except that
9. If all other things remain the same, less national savings will mean a ....
10. Currencies depreciate and appreciate all the time. Who gains and who loses when the Ghana cedis depreciates?
11. In which of the following situations would the multiplier effect on a country's economy of a tax cut implemented by that country's government be greatest?
12. If the marginal propensity to consume in the economy is 0.8 and the government increases its spending this year by GHS10 billion, what will be the additional increase in expenditure in the economy next year?
13. A deflationary gap occurs because ...
14. Which of the following statement is correct?
15. According to the interest rate effect, aggregate demand slopes downward (negatively) because lower prices ....
16. Assume that the economy is in equilibrium at an interest rate and level of national income where the IS curve cuts the LM curve. A large cut in government spending would be expected to ...
17. Assume a central bank has been charged with maintaining the price level at a rate of 2 per cent. For the past twelve months the inflation rate has been at target, and interest rates have been stable, but the government has been concerned over signs of a slowdown in economic activity. As a result, the government has decided to increase its spending on infrastructure projects. If the central bank wishes to maintain interest rates (and inflation) at a stable rate what should it do in the light of this decision?
18. As the interest rate falls, people become more willing to hold money until, at the equilibrium interest rate, they are happy
19. The crowding out effect is caused by ...
20. Along a short run Phillips curve, a higher rate of ....
