Question

1. Which of the following is considered a negative supply shock?

Select one:

a. Government-mandated shut-down of the retail sector to prevent a spread of a virus

b. A decline in wages

c. An unexpected large increase in the government bond yields

d. An improvement in video-conferencing technology

2. An Australian firm produces software in the UK, its market value will be included in

Select one:

a. Australia’s GDP.

b. neither Australia’s nor UK’s GDP as it is counted towards National Product

c. the UK’s GDP.

d. Both Australia’s and UK’s GDP

3. Economic response to the Coronavirus crisis in Australia included

Select one:

a. increase in the cash rate and a large fiscal stimulus

b. decrease in the exchange rate and a large fiscal stimulus

c. none of the answers is correct

d. decrease in the cash rate and a large fiscal stimulus

4. If the government purchases multiplier equals 2, and real GDP is $14 trillion with potential GDP $15 trillion, then government purchases would need to increase by ________ to restore the economy to potential GDP.

Select one:

a. $500 billion

b. $1 trillion

c. $7.25 trillion

d. $250 billion

Answer 1

1) Answer (a) is correct option

2) Answer (c) is correct option

3) Answer (a) is correct option

4) Answer (a) is correct option

Explanation

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