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Question 1: Which of the following will block an increase in the money supply from increasing real GDP (presumably to fight a recession)

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Question 1: Which of the following will block an increase in the money supply from increasing real GDP (presumably to fight a recession).
A. A situation in which business investment is completely insensitive to interest rate changes.
B. A situation in which the money demand curve is negatively sloping.
C. A situation in which an increase in money supply causes a decrease in interest rates.
D. A situation in which business investment is negatively related to the interest rates
E. A situation in which aggregate demand is negatively sloping.


Question 2: Suppose the price of a good is $100 at the beginning of the year. Suppose also that the price of this good increases at exactly the same rate as inflation. If the inflation rate is 10% per month (getting one tenth again larger each month), approximately how much will this good cost at the end of the year?


A. $110
B $220
C. $230
D. $256
E. $314


Question 3: Country A can produce one outfit in 6 hours and one unit of corn in 2 hour. Country B can produce one outfit in 16 hours and one unit of corn in 6 hours. Which of the following statements is true?


A. Country B has an absolute advantage in the production of both corn and outfits.
B. Country B has a comparative advantage in corn and will specialize in the production of corn if trade opens.
C. If trade opens, B will tend to specialize in the production of outfits while A will tend to specialize in the production of corn- then gains from trade would typically be possible.
D. Country A has a comparative advantage in outfits.
E. None of the above.