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ECO122

Question: Money and wealth are the same thing
Answer:  FALSE\

Question: Diamond Bank has, in the past, always operated with a reserve ratio of 25 per cent. It has now been taken over by Access Bank which operates with a reserve ratio of 12Â!4 per cent. Assuming that Diamond Bank adopts the business practices of its new owner, what will be the effect on money supply in Nigeria in wh n Diamond Bank operates?
Answer:  Money supply will increase because Diamond Bank will increase its loans.

Question: An increase in price expectations shifts the long-run aggregate supply curve to the
Answer:  Right

Question: A tax is a	levy imposed by
the government on individuals and business firms as it relates to the incomes, consumption, and production of goods and services
Answer:   compulsory

Question: Because export is‭	‬while a part
of import is an increasing function of income,
net exports are	related to national
income/national output.
Answer:  exogenous; negatively

Question: According to the wealth effect, aggregate demand slopes downward (negatively) because
Answer:  lower prices increase the value of money holdings and consumer spending increases.

Question: Which of the following statements is true regarding the long-run aggregate supply curve? The long-run aggregate supply curve
Answer:  is vertical because an equal change in all prices and wages leaves output unaffected.

Question: Which of the following statements is true regarding the long-run aggregate supply curve? The long-run aggregate supply curve
Answer:  is vertical because an equal change in all prices and wages leaves output unaffected.

Question: Is not one of the characteristics of budget
Answer:  Proportionality

Question: Given AD = C + I + G + NX , where C = 520 + 0.6Y; I = 120; and G = 200; NX = 12 and T = 150, what is the equilibrium output?
Answer:  1800

Question: Economists refer to fluctuations in output as the \
Answer:  Unpredictable

Question: Stagflation occurs when the economy experiences
Answer:  rising prices and falling output

Question: Which of the following would not cause a shift in the long-run aggregate supply curve?
Answer:  An increase in price expectations




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