1 True or False ( 40 points)

Please briefly justify your answer (max 5 lines). An answer with no justification will get no points. 1. In the quantity theory of money doubling the growth rate in the money supply doubles prices. 2. A country with hyperinflation usually has a budget deficit.

3. A worker quitting her job for better opportunities is an example of cyclical unemployment.

4. More firing costs leads to more unemployment in the long run.