Question 2 - Which of the following conclusions is not supported by the Three-Sector-Model?
a. A higher GDP Price Index in a nation increases the ability and willingness of domestic businesses to supply goods and services, but it decreases consumers' willingness and ability to buy them.
b. An increase in the supply of a nation's currency in the foreign exchange market lowers its international value.
c. An increase in nation's demand for goods and services within the Keynesian range is often accompanied by a strong rise in the consumer price index.
d. A decrease in nation's demand for goods and services within the Intermediate range usually leads to higher employment.
Question 3 - Which of the following assets is best to hold in periods of high and expected inflation?
a. Cash.
b. Checking account deposits.
c. Land.
d. Treasury Bills.
e. Bonds.
Question 4 - In the Keynesian range, the:
a. Aggregate supply curve is horizontal.
b. Aggregate demand curve is vertical.
c. Aggregate demand curve is horizontal.
d. Aggregate demand is downward-sloping.
e. Aggregate supply is upward-sloping.
Question 5 - Using the exact formula, the nominal interest rate equals:
a. Real interest rate + Actual inflation + (Real interest x Actual inflation).
b. Real interest Expected inflation.
c. Real interest + Expected inflation + (Real interest x Expected inflation).
d. Real interest Expected inflation (Real interest x Expected inflation).
Question 6 - In the Keynesian range, the:
a. Aggregate demand curve is horizontal.
b. Aggregate supply curve is horizontal.
c. Aggregate demand curve is vertical.
d. Aggregate supply is upward-sloping.
e. Aggregate supply curve is vertical.
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