Part $1$: MCQs$.$ Please write down your Multiple$-$choice answers below $[1$ point each$]$

$2$

$3$

$4$

$5$

$6$

$7$

$8$

$9$

$10$

$1.$ Which of the following best describes the concept of potential GDP$?$

a$.$ the total output that can be produced when all factors of production $($land$,$ labour, and capital$)$ are fully used

b$.$ the total output that can be produced when the economy is in short$-$run economic equilibrium

c$.$ the total output that can be produced when labour is not used

d$.$ the total output that could be produced in the future when we stop using land

$2.$ An important social cost of economic growth is

a$.$ the increasing inequality of income that usually accompanies sustained growth.

b$.$ the associated inflation.

c$.$ the associated unemployment.

d$.$ the destruction of jobs due to labour skills of certain workers becoming no longer useful.

$3.$ Consider the demand for money curve. As the interest rate falls, the opportunity cost of holding money is increasing, so people increase their desired money holdings.

b$.$ is increasing, so people decrease their desired money holdings.

c$.$ is decreasing, so people decrease their desired money holdings.

d$.$ is decreasing, so people increase their desired money holdings.

$4.$ Consider the government's budget balance. Suppose the government's net tax revenue is equal to

$520$ and G $=500,$ the government is running a budget

a$.$ deficit of $20.$

b$.$ surplus of $20.$

c$.$ balance.

d$.$ deficit of $300.$

$5.$ Doug buys chocolate bars at a superstore with $$5$ he had in his pocket. This represents using money as

a$.$ a medium of exchange.

b$.$ a store of value.