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Midterm Test Cityu 2021 With Answer Key

1. This document contains a midterm macroeconomics exam for a banking academy student. 2. The exam consists of multiple choice questions, true/false questions, and problems sections testing concepts like fiscal and monetary policy, GDP, money supply, and exchange rates. 3. The student's answers demonstrate understanding of expansionary and contractionary policies, how changes in exports versus imports affect the economy, and use of AD-AS models to analyze macroeconomic fluctuations.
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0% found this document useful (0 votes)
178 views3 pages

Midterm Test Cityu 2021 With Answer Key

1. This document contains a midterm macroeconomics exam for a banking academy student. 2. The exam consists of multiple choice questions, true/false questions, and problems sections testing concepts like fiscal and monetary policy, GDP, money supply, and exchange rates. 3. The student's answers demonstrate understanding of expansionary and contractionary policies, how changes in exports versus imports affect the economy, and use of AD-AS models to analyze macroeconomic fluctuations.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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BANKING ACADEMY MIDTERM TEST

INTERNATIONAL SCHOOL OF MACROECONOMICS


BUSINESS Time allowance: 120’

STUDENT’S FULL NAME:………………………………………………………….

CLASS:………………… Date of birth: . . ………………….. Student ID:……………………

(Note: Students are allowed to use the materials during the exam)

1. Multiple choices question

1.1. An example of an expansionary Fiscal policy is


a. An increase in the required reserve ratio b. A decrease in the Government spending
c. A reduction in taxation d. The Central Bank buying Government bonds in the open market
Answer:…………
1.2. Which of the following causes the Aggregate demand curve to shift right-ward?
a. An increase in the price level b. An increase in import
c. A decrease in the price level d. An increase in household consumption
Answer:………….
1.3. Suppose that the reserve ratio is 4%; the currency ratio is 8%; the monetary base is 2500, then:
1.3.1. The money multiplier and money supply will be.
a. 0,9 and 2250 b. 0,15 and 375
c. 9 and 22500 d. none above
Answer:…………..
1.3.2. If the target is reducing the Money supply 10%, then the Central bank should:
a. Buy bonds in the open market with the value of 250
b. Sell bonds in the open market with the value of 250
c. Buy bonds in the open market with the value of 375
d. Sell bonds in the open market with the value of 375
Answer:…………..

2. True or false question (6 marks)


2.1. In calculating GDP, we should add government’s purchase of goods and services with government’s
income transfers.

Answer:…………..

2.2. You take $100 you kept under your mattress and deposit it in your bank account. This action will make
M1 increase and M0 remain unchanged.

Answer:…………..
2.3. In a close economy, interest rate, national saving, private saving, investment will increase if the
Government increases purchase of goods and services.
Answer:……………

2.4. The inflow of FDI will impove CA balance and BoP.

Answer:……………

2.5. The production of Honda cars in Vietnam contributes to both Vietnam’s GDP and GNP.

Answer:…………..

2.6. If the Central bank wants to increase the money supply, they should purchase government bonds in open
market operation, reduce required reserve ratio, and reduce discount rate.

Answer……………

2.7. In a close economy, interest rate will increase, but national saving, private saving, investment will
decrease if consumers become optimistic about future income and consume more.

Answer:……………

2.8. The increase in crude oil affects both CPI and GDP deflator.

Answer:……………

B. Problems (4 marks) – write the answer in your paper and submit it along with this Question sheets.
1. In an economy with no cash in payment, all banks maintain reserve ration of 10%. Calculate the change in
money supply after the central bank purchases $1000 million government bonds in open market operation.
Use diagram of money market to explain the changes in money supply and value of money.

2. In 2018, Vietnam’s exports of goods increase sharply compared to imports. Using AD-AS model to
explain the fluctuations in the economy. Suggest macroeconomic policies that can bring the economy to the
initial price level?

-----THE END------

Part I: Multiple choice questions (2.5 marks)

1. B

2. C

3. D

4.1. C

4.2. B

Part 2. True/False (4 marks)

1. (0.5 marks) False


2. (0.5 marks) False
3. (0.5 marks) False
4. (0.5 marks) True
1. (0.5 marks) False
2. (0.5 marks) True
3. (0.5 marks) True
4. (0.5 marks) False

Part 3. Problems (3.5 marks)


1. (0.5 marks) Money multiplier is 10
(0.5 marks) Money base increases $1000
(0.5 marks) Money supply increases $10,000
(0.5 marks) Diagram: money supply increases  value of money decreases

2. Net export increases  AD increases


(0.5 marks) AD increases  Price increases, Total output increases, Unemployment decreases
(0.5 marks) Policies: contractionary fiscal policy and contractionary monetary policy
(0.5 marks) Diagram

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