Reference no: EM133080656

1. With respect to theory of long run growth, the opportunity cost of increased savings is:

• a fall in nominal wages.
• a rise in inflation.
• a rise in budget surplus.
• a fall in exchange rates.
• a fall in consumption.

2. With respect to theory of long run growth, the opportunity cost of increased savings is:

• a fall in nominal wages.
• a rise in inflation.
• a rise in budget surplus.
• a fall in exchange rates.
• a fall in consumption.

3. To conduct a contractionary monetary policy, the central bank will perform:

• an open market operation to reduce foreign exchange reserves.
• an open market operation to achieve a government balanced budget.
• an open market operation sale of government bonds.
• an open market operation to stimulate foreign trade.
• an open market operation purchase of government bonds.

4. Holding other influences on expenditure plans remain constant, the aggregate demand curve illustrates the relationship between ___________.

• the price level and the quantity of real GDP supplied
• the price level and the nominal interest rate
• the price level and the quantity of real GDP demanded
• the price level and the real exchange rate
• the price level and the potential GDP

5. Workers in country X have gained access to a substantial quantity of capital. As the amount of capital available per worker in the country ________, output will increase at a(n) ________ rate.

• increases; diminishing
• decreases; diminishing
• increases; increasing
• increases; constant
• decreases; increasing