LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

Which government policy to managing business cycle that will be implemented faster?

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

Central bank increase bond sales when the economy is

booming. The central bank will reduce inflation pressure.

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

The government increases spending when the economy is

booming. The government action can be considered as

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

Consider free float exchange rate. Country A experiences an export-import

deficit with country B and an export-import deficit with country C. Which

statement is not correct?

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

Carry trade transactions effect on exchange rate fair value

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

Consider stagflation conditions. Central bank decide to increase

interest rates. What are the expected effects?

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

Stagflation is easier to tackle than recessions.

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

LM (Liquidity Preference) is more related to monetary policy

because monetary policy has direct effect on interest rates.

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

IS (Investment-Saving) curve is more related to monetary

policy because monetary policy has a direct effect on saving rates

LG 1. Knowledge Comprehension

LO 1.1. Generate knowledge of core concept and theory

Demand pull inflation is easier to handle than cost push

inflation