macro economics

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  • Created by: amit
  • Created on: 21-04-15 21:22

1. When the central bank buys €1,000,000 worth of government bonds from the public, the money supply:

  • increases by €1,000,000.
  • increases by less than €1,000,000.
  • increases by more than €1,000,000.
  • decreases by €1,000,000.
  • does not change.
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2. The nominal interest rate equals the

  • inflation rate times the real interest rate.
  • real interest rate divided by the inflation rate.
  • real interest rate plus the inflation rate.
  • real interest rate minus the inflation rate
  • inflation rate minus the real interest rate.

3. The two main responsibilities of the European Central Bank are to _____ and to ______.

  • conduct monetary policy; oversee financial markets
  • apprehend counterfeiters; regulate the stock market
  • collect taxes; pay the government's expenses
  • enable banks to make affordable mortgages; control the exchange rate of the Euro
  • insure bank deposits; print currency

4. The tendency of changes in asset prices to affect spending on consumption goods is called the _____ effect.

  • wealth
  • income
  • consumption
  • substitution
  • multiplier

5. The unemployment rate equals the number of people:

  • unemployed divided by the labour force.
  • unemployed.
  • unemployed divided by the number employed
  • unemployed plus discouraged workers divided by the labour force.
  • unemployed plus discouraged workers divided by the number employed.

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