1) The wealth effect that occurs when the price level rises causes the

Select one:

a.nominal value of household wealth to fall.

b.real value of household wealth to rise.

c.real value of household wealth to fall.

d.nominal value of household wealth to rise.

2) When conducting fiscal policy it is important to know whether an economy is closed or open because

Select one:

a.None of the answers is correct, openness of the economy does not impact on the effectiveness of the fiscal policy

b.Expansionary fiscal policy crowds out investment spending only in an open economy.

c.Expansionary fiscal policy is much more effective in an open economy.

d.Expansionary fiscal policy is less effective in an open economy

3) The unemployment resulting from workers laid off due to a temporary supply shock during the Coronavirus pandemic can most likely be classified as

Select one:

a.frictional unemployment

b.government-imposed unemployment

c.natural unemployment

d.cyclical unemployment

4) The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100.

Select one:

a.GNI; nominal GDP; real GDP

b.GDP deflator; nominal GDP;real GDP;

c.none of the answers is correct

d.CPI; real GDP; nominal GDP

5) Economic response to the Coronavirus crisis in Australia included

Select one:

a.none of the answers is correct

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

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

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

6) Suppose that as a result of the government policy we expect a permanent decrease in the flow of migrant workers into the United States. As a result, we can expect

Select one:

a.a right-ward shift in the aggregate demand curve

b.a right-ward shift in the short-run aggregate supply curve

c.this will not have any effect on the US economy in the short or long run

d.a left-ward shift in the long-run aggregate supply curve