Question : Inflation is caused  by

Option 1: Increase in money supply and decrease in production

Option 2: increase in money supply

Option 3: increase in production

Option 4: decrease in prodution

Question : The concept of the multiplier effect suggests that an increase in:

Option 1: Investment expenditure leads to a larger increase in real GDP
    

Option 2: Consumption expenditure leads to a larger increase in real GDP
  

Option 3: Government expenditure leads to a larger increase in real GDP

Option 4: Net exports leads to a larger increase in real GDP

Question : A decrease in tourism receipts leads to a _____________in the current account balance.

Option 1: increase

Option 2: decrease

Option 3: surplus

Option 4: deficit

Question : The wealth effect suggests that an increase in the price level leads to:

Option 1: A decrease in consumption expenditure
 

Option 2: An increase in consumption expenditure
 

Option 3: A decrease in investment expenditure

Option 4: An increase in investment expenditure

Question : Water tax is increased by 20% but its consumption is decreased by 20%. Then, the increase or decrease in the expenditure of money is:

Option 1: 5% decrease

Option 2: 4% decrease

Option 3: No change

Option 4: 4% increase