Question

1) In POW camps during WW2, prisoners used cigarettes in payment for goods and services. This is an example of the use of

Select the correct answer below:

a) cigarette money

b) fiat money

c) commodity money

d) liquid money

2) If business confidence is high, then firms ______________________.

Select the correct answer below:

a) tend to spend less on investment

b) tend to spend more on investment

c) will not change the amount they spend on investment

d) none of the above

3) In the long run, the Phillips Curve is

Select the correct answer below:

a) horizontal at a fixed price level

b) vertical at the natural rate of unemployment

c) downward sloping, illustrating the tradeoff between inflation and unemployment

d) upward sloping, illustrating a positive relationship between inflation and unemployment

4) In 2018, the US economy's unemployment rate plunged below the natural rate. This is an example of

Select the correct answer below:

a) a recessionary gap

b) an inflationary gap

c) stagflation

d) recession

5) The holding of a US government bond by a bank is an example of a(n) _______.

Select the correct answer below:

a) goodwill

b) asset

c) liability

d) share capital

Answer 1