Midterm Test Cityu 2021 With Answer Key
Midterm Test Cityu 2021 With Answer Key
(Note: Students are allowed to use the materials during the exam)
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:……………
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?
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1. B
2. C
3. D
4.1. C
4.2. B