Question 1: An increase in aggregate demand is expected to lead to
o Inflation and Economic Growth
o Inflation and Recession
o Inflation and rise in unemployment
o None of the above

Question 2: An increase in aggregate supply is expected to lead to
o Inflation and Economic Growth
o Inflation and Recession
o Deflation and fall in unemployment
o None of the above

Question 3: A decrease in aggregate supply is expected to lead to
o Inflation and Economic Growth
o Inflation and Recession
o Deflation and fall in unemployment
o None of the above

Question 4: An increase in government expenditures is expected to lead to
o Inflation and Economic Growth
o Inflation and Recession
o Deflation and fall in unemployment
o None of the above

Question 5: Cutting income taxes is expected to lead to
o Inflation and Economic Growth
o Inflation and Recession
o Deflation and fall in unemployment
o None of the above

Question 6: Reducing government expenditures is expected to lead to
o Inflation and Economic Growth
o Deflation and Recession
o Deflation and fall in unemployment
o None of the above

Question 7: Bond purchases by the Federal Reserve is expected to lead to
o Rise in interest rates
o Fall in interest rates
o Increase in unemployment
o None of the above

Question 8: Bond sales by the Federal Reserve is expected to lead to
o Rise in interest rates
o Fall in interest rates
o Fall in unemployment
o None of the above

Question 9: Bond sales by the Federal Reserve is an example of
o Expansionary Monetary Policy
o Expansionary Fiscal Policy
o Contractionary Monetary Policy
o None of the above

Question 10: Bond purchase by the Federal Reserve is an example of
o Expansionary Monetary Policy
o Expansionary Fiscal Policy
o Contractionary Monetary Policy
o None of the above

Question 11: Expansionary monetary policy is expected to lead to
o Increase in the rate of interest
o Decrease in the rate of interest
o Appreciating domestic currency
o None of the above

Question 12: Contractionary monetary policy is expected to lead to
o Increase in the rate of interest
o Decrease in the rate of interest
o Depreciating domestic currency
o None of the above

Question 13: Unemployment is expected to decrease in response to
o Decrease in government spending
o Bond sales by the Federal Reserve
o Bond purchase by the Federal Reserve
o None of the above

Question 14: Unemployment is expected to decrease in response to
o Decrease in government spending
o Bond sales by the Federal Reserve
o Interest rate cut by the Federal Reserve
o None of the above

Question 15: Investments in human capital is expected to lead to
o Long term recession
o Depression
o Long term economic growth
o None of the above