8) According to the Classical
Dichotomy, a country with a hyper-inflation due to excessive money
supply growth should have: nominal wage rising i.e.Option(D)
is correct.
9)According to the Quantity Theory
of Money and the Fisher equation, a rise in money supply (for a
given level of GDP and velocity) should raise the:inflation
rate and nominal interest rate i.e. Option(C) is correct
12)
Cause of this recession isan
exogenous fall in consumption due to low consumer
confidence.i.e.option (a)is correct.Downward pressure on
aggregate demand will shift the IS curve to the left.
13)In the IS-LM model, if
investment becomes more sensitive to the interest rate, this makes
the IS curve flatter.i.e.option (B) is correct