Profitable investment is most effectively promoted when:

Profitable investment is most effectively promoted when:
 a. the money supply and price level are stable.
  b. inflation is rising rapidly.
 c. monetary policy is unanticipated.
 d. persistent inflation increases uncertainty.

Question 2

Suppose the real GDP in an economy in the year 1999 was 2,000 and the total population was 500 . The economy experienced a 5 growth in real GDP and a 2 growth in its population in 2000 . Calculate the change in per capita income of the economy during this period.
 a. +1
  b. +2.5
  c. -3
  d. +3
  e. -4

Question 3

As the time to respond to a change in market conditions increases, the odds of supply being elastic:
 a. Increase.
 b. Decrease.
 c. Stay the same.
 d. Cannot be determined.

Question 4

The most likely impact of an unanticipated increase in the money supply is a(n):
 a. increase in the real interest rate, which in turn stimulates investment and GDP.
 b. decrease in the real interest rate, which in turn stimulates investment and GDP.
 c. decrease in real output, which causes the real interest rate to decline and in turn stimulate investment and GDP.
  d. increase in real output, which causes the real interest rate to decline.

Question 5

In 2000 . the real GDP for Malaysia was 93.15 trillion ringgit (MYR) and the population size was 20.5 million, then per capita real GDP for the year was approximately equal to _____.
 a. MYR 4.54 million
  b. MYR 45.9 million
  c. MYR 1,909.5 million
  d. MYR 191 million
  e. MYR 9,315 million

Question 6

As the time to respond to a change in market conditions increases, the odds of demand being elastic:
 a. Increase.
 b. Decrease.
 c. Stay the same.
 d. Cannot be determined.

Question 7

When the Fed unexpectedly increases the money supply, it will cause an increase in aggregate demand because:
 a. real interest rates will fall, stimulating business investment and consumer purchases.
 b. the dollar will depreciate on the foreign exchange market, leading to an increase in net exports.
 c. lower interest rates will tend to increase asset prices, which increases wealth and thereby stimulates current consumption.
  d. of all the above reasons.

Question 8

Per capita real GDP is:
 a. equivalent to the real GDP level.
  b. a measure of the value of output produced and available to an average person.
  c. higher in developing countries than in developed countries.
  d. a measure of an economy's income distribution.
  e. a measure of the GDP per country.

Question 9

Which of the following would be most inelastic with regard to price?
 a. a Samsung LCD television
 b. a Sony LCD television
 c. all LCD televisions
 d. Demand for all of the above would be equally elastic because none are necessities.

Question 10

When money demand decreases, the Fed can choose between:
 a. increasing interest rates or increasing the supply of money.
  b. increasing interest rates or decreasing the supply of money.
  c. decreasing interest rates or increasing the supply of money.
  d. decreasing interest rates or decreasing the supply of money.

Question 11

If Korea's average annual growth rate is 9 percent and that of the United States is 4 percent, the time required for Korea's real GDP to double will be ____ less than the time required for the GDP of the United States to double.
 a. 3 years
  b. 6 years
  c. 12 years
  d. 15 years
  e. 10 years