1 Fiscal policy can shift A both aggregate demand and shortrun aggregate supply but not longrun aggregate


1.Fiscal policy can shift: A. both aggregate demand and short-run aggregate supply, but not long-run aggregate

supply B. money demand C. aggregate demand only D. aggregate supply only E. none of above

2.An automatic stabiliser is A. a tax or form of government expenditure that has the effect of smoothing business cycles B. a monetary or fiscal policy that aims to smooth out the business cycle C. the tendency for inflation to fall as unemployment rises D. a policy for growth of an economy where the current account is kept in balance E. none of above

3.As long as aggregate supply remains constant, the greater the increase in aggregate demand the: A. greater the increase in the inflation rate B. greater the increase in the rate of unemployment C. smaller the decrease in employment D. larger the increase in real output E. none of above

4. Accounts kept by the commercial banks with the Reserve Bank, which are used to manage the flow of funds between commercial banks generated by the commercial activities of their customers, are called: A. customers offset accounts B. mortgage settlements accounts C. customers’ settlement accounts D. exchange settlement accounts E. short-term settlement accounts

5.A record of all the transactions made between the residents of one country and the residents of all other countries is known as the: A. net external balance sheet B. balance on merchandise trade C. capital account D. balance of payments E. current account