An increase in the money supply typically leads to
A) a reduction in the rate of interest.
B) a decrease in the price level.
C) a reduction in the velocity of money.
D) an inward shift in money demand.
Ques. 2In the Keynesian model, to understand the determination of income and employment it is necessary to understand
A) how aggregate supply is determined.
B) how aggregate demand is determined.
C) how long-run aggregate supply is determined.
D) how interest rates are determined.
Ques. 3The key feature of monopolistic competition is
A) interdependence of the firms.
B) lack of advertisement.
C) product differentiation.
D) the small number of firms in the industry.
Ques. 4Countries with higher rates of saving
A) experience lower growth rates in the future.
B) have a large population.
C) have a greater number of poor people.
D) have higher rates of growth.
Ques. 5The relationship between quantity supplied and the price of output is such that
A) an increase in quantity will automatically lead to a reduction in price.
B) an increase in price will lead to an increase in quantity supplied.
C) an increase in price will produce an inward shift in the supply curve.
D) quantity will decrease as the number of firms increases.
Ques. 6The term or phrase most likely to indicate a normative statement is
A) ceteris paribus.
B) factual. or what is statement.
C) holding other things constant.
D) should or ought to.
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