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The suggested solutions of the Post-Mock papers will be posted after the Easter Holiday.

Missing questions of Post Mock Paper 2:

Section A:

Q8: In the process of money creation, if the initial deposit id newly printedmoney and there exists cash leakage,

A. the change in total deposits will be smaller than the change in money supply.
B. the change in total deposits will be equal to the change in money supply.
C. the change in total deposits will be larger than the change in money supply.
D. there is insufficient information to determine the relative size of the change in total deposits and money supply.
 

Q14: The steeper the IS curve is

(1) the more effective the fiscal policy will be.
(2) the less effective the fiscal policy will be.
(3) the more effective the monetary policy will be.
(4) the less effective the monetary policy will be.

A. (1) only.
B. (4) only.
C. (2) and (3) only.
D. (1) and (4) only.
 

Q18: Full employment occurs when

A. all workers in the economy are employed for production.
B. at the prevailing market wages, the total of labour service supply planned is met with the demand.
C. all resource that can be used for production are fully utilized.
D. the level of production is the maximium quantities of goods and services that can be produced with all the productive resources in an economy.
 

Q24: The diagrams below show the PPC of the two economies. They are assumed to be the same shape. They have the same amount of resources and technologyin production.

The PPC of Country A with X intercept, 25 good C, and Y intercept of 50 good W.

The PPC of Country B with X intercept, 50 good C, and Y intercept of 100 good W.

Which one of the following statements is NOT true?

A. Country A has absolute advantage in production over Country B.
B. Country A and Country B have the same opportunity costs in producing these two goods.
C. Assuming full employment in these two economies, the full employment real output of A is larger than that of B.
D. Country A and Country B can't have trade between them because they both have the same pattern of comparative advantage.
 

Q28: To effectively correct a trade deficit inder the initial condition of full employment, the government can:

A. devaluate the domestic currency.
B. subsidize export industries to promote exports.
C. sell more government securities to the public.
D. decrease sales tax on exported goods.
 
 

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