I.

LECTURE 5
1. An increase in the minimum wage above the equilibrium wage
a. increases frictional unemployment.
b. increases structural unemployment.
c. reduces structural unemployment.
d. reduces frictional unemployment.
2. The labor-force participation rate measures the percentage of the
a. labor force that is either employed or unemployed.
b. The total adult population that is employed.
c. The labor force that is employed.
d. The total adult population that is in the labor force.
3. Hoa just graduated from college. In order to devote all her efforts to college, she didn't hold a job.
She is going to tour around the country on her motorcycle for a month before she starts looking for
work. Other things the same, the unemployment rate:
a. increases, and the labour-force participation rate decreases.
b. and the labour-force participation rate both increase.
c. increases, and the labour-force participation rate is unaffected.
d. and the labor-force participation rate are both unaffected.
4. Suppose that some country had an adult population of about 46 million, a labor-force participation
rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed?
a. 2.54 million
b. 2.76 million
c. 3.68 million
d. 8 million
5. The government eliminates the minimum wage. This would be most likely to:
a. reduce frictional unemployment.
b. increase frictional unemployment.
c. reduce structural unemployment.
d. increase structural unemployment.
6. Minimum wage laws, labor unions, and efficiency wages are the three explanations for:
a. natural unemployment.
b. cyclical unemployment.
c. structural unemployment.
d. frictional unemployment.
7. Government-run employment agencies, public training programs, and unemployment insurance are
public policies to deal with _________ in the _________
a. frictional unemployment, long-term.
b. structural unemployment, short-term.
c. frictional unemployment, short-term.
d. structural unemployment, long-term.
8. The table below lists the number of people by labor force classification for the Vinh Phuc province.
 a. Describe shortly how unemployment rate overstates the amount of joblessness and how it
understates the amount of joblessness.
b. Calculate the size of the labour force and the labour force participation rate. (4 marks)
c. Calculate the unemployment rate - U3. (4 marks)
II. LECTURE 6: THE MONETARY SYSTEM
1. A bank has $8,000 in deposits and $6,000 in loans. It has loaned out all it can, given the reserve
requirement. Calculate the reserve requirement is:
a. 75 percent.
b. 33.3 percent.
c. 2.5 percent.
d. 25 percent.
2. Which of the following both INCREASE the money supply?
a. An increase in the discount rate and an increase in the reserves requirement ratio.
b. An increase in the discount rate and a decrease in the reserves requirement ratio.
c. A decrease in the discount rate and a decrease in the reserves requirement ratio.
d. A decrease in the discount rate and an increase in the reserves requirement ratio.
3. Which of the following is included in M1?
a. Currency, demand deposits, and other checkable deposits.
b. Traveler's checks, demand deposits, and savings deposits.
c. Currency, credit card limits and money market mutual funds.
d. Currency, demand deposits, and savings deposits.
4. If the banks in an economy operate with a reserve ratio of 20 percent then the money multiplier is:
a. 4
b. 5
c. 20
d. 25
5. Money serves as a medium of exchange when:
a. sellers are willing to accept it in exchange for goods or services.
b. prices of goods and services are stated in the monetary unit.
c. it can be easily stored and used for transactions in the future.
d. all of the above.
6. Liquidity refers to
a. The ease with which an asset is converted to the medium of exchange.
b. How many times a dollar circulates in a given year.
 c. The suitability of an asset to serve as a store of value.
d. A measurement of the intrinsic value of commodity money.
7. If the Fed wanted to decrease the money supply, it would:
a. buy government bonds.
b. reduce reserve requirements.
c. sell government bonds.
d. reduce the discount rate.
8. ABC bank holds VND 300 trillion of required reserves and VND 75 trillion of excess reserves and has
issued VND 7,500 trillion of deposits.
a. Show a T-account. Calculate the reserve amount, reserve ratio, and money multiplier.
b. If the Central bank requires the ABC bank to decrease the current reserve ratio to 4%, how does it
affect the reserves and money supply?
c. Describe briefly how banks create money. If the reserve ratio is 25% (R), compute the money
multiplier.

III. LECTURE 7: MONEY GROWTH AND INFLATION

1. According to the assumptions of the quantity theory of money, if the money supply increases by 5
percent, then:
b. nominal and real GDP would rise by 5 percent.
c. nominal GDP would rise by 5 percent; real GDP would be unchanged.
d. nominal GDP would be unchanged; real GDP would rise by 5 percent.
e. Neither nominal GDP nor real GDP would change.
2. If M = 2,000, P = 2.25, and Y = 6,000, what is velocity?
a. 6.75.
b. 3.00.
c. 1.33.
d. 1.50.
3. If the real interest rate is 6 percent and the price level is falling at a rate of 2 percent, what is the nominal
interest rate?
a. 4 percent.
b. 6 percent.
c. 8 percent.
d. 10 percent.
4. If Y and V are constant and the change in M doubles, the quantity equation implies that the change in
the price level
a. doubles.
b. more than doubles.
c. changes but less than doubles.
d. does not change.
5. A fall in the overall price level raises the value of money, so money demand _________ and the interest
rate __________
a. falls, falls
b. rises, rises
c. falls, rises
d. rises, falls
6. According to the principle of monetary neutrality,
a. changes in the money supply do not affect real variables.
 b. real variables do not affect nominal variables.
c. nominal variables are not adjusted for inflation and real units are adjusted for inflation.
d. nominal variables are expressed in monetary units and real variables are expressed in physical units.
7. The Fisher effect is:
a. the adjustment of the real interest rate to the inflation rate.
b. the one-for-one adjustment of the nominal interest rate to the inflation rate.
c. the adjustment of the money supply to the inflation rate.
d. None of the above is right.
8. Inflation ________ savers' tax burdens, and ________ the after-tax real interest rate.
a. increases, increases
b. increases, lowers
c. lowers, lowers
d. lowers, increases
9. "Inflation tax" means that:
a. As the price level rises, taxpayers are pushed into higher tax brackets.
b. As the price level rises, the real value of money held by the public decreases.
c. As taxes increase, the rate of inflation also increases.
d. In a hyperinflation, the chief source of tax revenue is often the printing of money.
10. The economy has enough labor, capital, and land to produce Y = 10,000 bushels of corn. V is constant.
In 2020, MS = $25,000, P = $10/bushel. For 2021, the Central Bank will increase MS by 10% to $27,500.
a. Compute the 2021 values of nominal GDP and P. Compute the inflation rate and the nominal GDP
growth rate for 2020-2021.
b. Suppose tech. Progress causes Y to increase by 3% in 2021 to 10,300 bushels of corn. Compute the
inflation rate for 2020-2021.
IV. LECTURE 8: AGGREGATE DEMAND AND AGGREGATE SUPPLY
1. An increase in household savings causes consumption to
a. rise and aggregate demand to increase.
b. rise and aggregate demand to decrease.
c. fall and aggregate demand to increase.
d. fall and aggregate demand to decrease.
2. Imagine that in 2019 the economy is in long-run equilibrium. Then stock prices rise more than expected
and stay high for some time. Which curve shifts and in which direction?
a. Aggregate demand shifts right.
b. Aggregate demand shifts left.
c. Aggregate supply shifts right.
d. Aggregate supply shifts left.
3. LRAS stands for the long-run aggregate supply curve. Which of the following situations is consistent
with this graph:
 a. Exports of the economy increased.
b. Household spending fell due to the economic crisis.
c. Businesses increase investment.
d. The technological level of the economy has improved.
4. Which of the following best describes how an increase in the money supply shifts the aggregate demand
curve?
a. The money supply shifts right, prices fall, spending increases, and the aggregate demand curve
shifts right.
b. The money supply shifts right, the interest rate falls, investment increases, and the aggregate
demand curve shifts right.
c. The money supply shifts right, the interest rate rises, investment decreases, and the aggregate
demand curve shifts left.
d. The money supply shifts right, prices rise, spending falls, and the aggregate demand curve shifts
left.
5. Stagflation is a period of
a. rising output and falling prices.
b. rising output and rising prices.
c. falling output and falling prices.
d. falling output and rising prices
6. When VND depreciates against USD, Vietnam's net export will ______, and its aggregate demand curve
will shift to ________.
a. increase, the right
b. decrease, the right
c. decrease, the left
d. increase, the left
7. The aggregate demand curve slopes downward due to:
a. the sticky-wage effect
b. the interest rate effect
c. the sticky-price effect
d. the misperceptions effect
8. Which of the following shifts aggregate demand to the right?
a. An increase in government expenditures or a decrease in the price level.
b. A decrease in government expenditures or an increase in the price level.
c. An increase in government expenditures, but not a change in the price level.
d. A decrease in the price level, but not a decrease in government expenditures.
9. Suppose that a wave of optimism about the future overruns the economy and investors in Vietnam. Use
the model of aggregate demand and aggregate supply to analyze the effect on Vietnam's economy.
(Students are required to do this by using the framework of 4 steps and drawing the diagram).
10. List three theories that explain why the short-run aggregate supply curve is upward-sloping.
a. What variables shift both the long-run and short-run aggregate supply curves?
b. What variable shifts the short-run aggregate supply curve but not the long-run aggregate- supply
curve?
V. LECTURE 9:
1. Assume the MPC is 0.625. Assume there is a multiplier effect and that the total crowding-out effect is
$12 billion. An increase in government purchases of $30 billion will shift aggregate demand to the:
a. left by $60 billion.
b. left by $36 billion.
c. right by $68 billion.
d. right by $36 billion.
2. If the marginal propensity to consume MPC is 0.75, the value of the multiplier is:
a. 4
b. 7.5
c. none of these answers
d. 5
3. Fiscal policy refers to the idea that aggregate demand is affected by changes in:
a. the money supply.
b. government spending and taxes.
c. trade policy.
d. interest rates.
4. An increase in the money supply will
a. increase interest rates, decreasing investment and aggregate demand.
b. reduce interest rates, increasing investment and aggregate demand.
c. reduce interest rates, decreasing investment and increasing aggregate demand.
d. increase interest rates, increasing investment and aggregate demand.
5. When the government increases its purchases by $20 billion, the aggregate demand for goods and
services could
a. rise by less than $20 billion when the crowding-out effect is smaller than the multiplier effect.
b. rise by more than $20 billion when the crowding-out effect is smaller than the multiplier effect.
c. rise by more than $20 billion when the crowding-out effect is larger than the multiplier effect.
d. rise by less than $20 billion when the crowding-out effect is equal to the multiplier effect.
6. An expansionary monetary policy is used when the economy is _______. This policy helps the economy
reduce _________, but the economy may face to a rise in _________.
a. Overheated, inflation, unemployment.
b. Overheated, unemployment, inflation.
c. Sluggish, inflation, unemployment.
d. Sluggish, unemployment, inflation.
7. If MPC = 0.5, ∆G = $10 billion, and there is no crowding-out effect, then ∆Y will be:
a. $35 billion.
b. $30 billion.
c. $25billion.
d. $20 billion
8. When the government cuts its spending, the aggregate demand and output will _______. To offset this
event, the Fed should _________ the money supply to ________ the interest rate to increase the
aggregate demand.
a. increase, fall, reduce
b. rise, increase, reduce
c. fall, decrease, increase
d. fall, increase, reduce
9. A contractionary monetary policy is used when the economy is _______. This policy helps the economy
reduce _________. This but the economy may face to a rise in ________
a. Sluggish, inflation, unemployment.
b. Sluggish, unemployment, inflation.
c. Overheated, unemployment, inflation.
d. Overheated, inflation, unemployment.
10. Suppose that the Federal Reserve responds immediately to the decline in business confidence in the
short run by increasing the money supply.
a. Which type of policies has been implemented?
b. Explain the influences of this policy on the economy's aggregate demand and illustrate your answer
with a diagram below.
11. When does the government use contractionary fiscal policy? How can the government implement the
policy? How does the policy affect the economy (aggregate demand, overall price level, the output &
unemployment; suppose aggregate supply unchanged)? What are the advantages and disadvantages of the
policy?

PRACTICES

1. The government's increasing budget spending to promote infrastructure construction will:

a. Increase aggregate demand.
b. Increases GDP.
c. Create more new jobs.
d. All answers are correct
2. Inflation comes from which of the following causes:
a. Increased taxes slow down economic growth.
b. The budget is in deficit and the government prints more cash.
c. Foreign investment capital decreased.
d. Household income remains unchanged.
3. Inflation is the phenomenon of:
a. Prices of goods and services increase continuously over a period of time.
b. Underemployment in the economy.
c. Economic growth slows down.
d. Foreign investment capital increased.
4. Which of the following information reflects economic fluctuations?
a. Economic fluctuations are unusual and difficult to predict.
b. Most macro indicators fluctuated.
c. When output decreases, unemployment increases.
d. All answers are correct.
5. The neutrality of money reflects:
a. Changes in the money supply affect real variables, not nominal variables.
 b. Changes in the money supply affect nominal variables, not real variables.
c. Changes in the money supply affect both nominal and real variables.
d. Changes in the money supply do not affect either nominal or real variables.
6. The picture below shows which state?

a. Equilibrium of the money market in the short run.

b. Equilibrium of the money market in the long run.
c. Long-run commodity market equilibrium.
d. Equilibrium of the commodity market in the short

7. Which situation is consistent with the market developments in the chart below?

a. Aggregate demand decreases.

b. Total supply increases.
c. Aggregate demand increases.
d. Total supply decreases.

8. In the following cases, what is the inflation rate of about 12% compared to the previous year?
a. A year ago the price index had a value of 134 and now it reaches 150.
b. A year ago the price index had a value of 100 and now it reaches 120.
c. A year ago the price index had a value of 120 and now it reaches 132.
d. A year ago the price index had a value of 145 and now it reaches 163.
9. LRAS is the symbol for the long-run aggregate supply curve. Which of the following situations is
appropriate for this graph?

a. The economy's exports increased.

b. Household spending decreased due to the economic crisis.
c. Businesses increase investment.
d.The technological level of the economy is improved.

10. In the following cases, where is the inflation rate reaching 15% compared to the previous year?
a. A year ago the price index had a value of 110 and now it reaches 115.
b. A year ago the price index had a value of 138 and now it reaches 152.
c. A year ago the price index had a value of 120 and now it reaches 138.
d. A year ago the price index had a value of 152 and now it reaches 169.
11. Assuming the chart below depicts the short-term economy, which situation is consistent with the
graph below?

a.Household spending decreased.

b.Businesses increase investment.
c. The government increased spending on infrastructure.
d.All answers are correct

12. In the short term, which situation is consistent with the marker developments in the chart below?

a. The central bank increases the required reserve ratio.

b. There is a round of outs in public spending.
c. An import tax is enacted to limit the flow of goods
from foreign countries.
d. All answers are wrong

13. LRAS is the symbol for the long-run aggregate supply curve. Which of the following situations is
NOT appropriate for this

a. The economy's labor supply increases.

b. Better natural resource exploitation technology.
c. The economy's price level increases.
d. The economy's production technology is improved

14. Assuming the chart below depicts the short-term economy which situation is consistent with the
graph below

a. The central bank reduces the required reserve ratio.

b. Rising interest rates in the market have caused
disruption to some business projects.
c. A trade agreement was signed with the expectation of
boosting exports to foreign markets.
d. All answers are wrong
15. When economists claim that economic fluctuations are "irregular and unpredictable", this implies
that:
a. The relationship between output and unemployment is irregular and difficult to determine.
b. When one macroeconomic variable measuring income or spending is falling, it is possible that
some other macroeconomic variable measuring income or spending is rising.
c. Recessions do not occur at regular intervals.
d. All answers are correct
16. Currency has which of the following functions
a. All answers are correct
b. Payment method
c. Reserve means
d. Accounting means
17. Monetary policy is implemented by which of the following agencies:
a. The financial
b. State Planning Committee
c. Central bank
d. Government office
18. The Central Bank's regulations on compulsory reserves include:
a. Percentage of reserves in precious metals such as gold, at intermediary banks
b. Ratio of foreign currency reserves at intermediary banks
c. The minimum reserve ratio that intermediary banks are required to retain from deposits
d. The ratio of cash reserves to precious metals such as gold
19. The Central Bank reduced the required reserve ratio from 10% to 5%. This action will cause:
a. Increased risks of the banking system
b. Not related to banking system risks
c. Reduce risks of the banking system
d. Not enough information to draw conclusions
20. The required reserve ratio is at 5%. Intermediary bank A receives a new deposit amount of
$1000,000. Thus, the reserve amount must be at:
a. $50000
b. $500
c. $5000
d. $500000
21. Central Bank A receives new deposits of $1000. The required reserve ratio is 10%. How much
will the money supply increase?
a. $10000
b. $100
c. $1000
d. $100000
22. Using currency to buy and sell goods and services is the function of:
a. Reserve function
b. Payment function
c. Accounting function
d. All answers are correct
23. Central Bank A receives new deposits of $1000. The required reserve ratio is 10%. What is the
current money multiplier
a. 10
b. 100
c. 1000
d. 1
24. If the central bank increases the money supply, which of the following statements is TRUE about
the money supply curve?
a. Shifts to the right and causes interest rates to decrease
b. Shifts to the right and causes interest rates to increase
c. Shift to the left and increase interest rates
d. Shift to the left and cause interest rates to decrease
25. Inflation is understood as:
a. An increase in the general price level and a decrease in the value of the domestic currency
b. An increase in the general price level and an increase in the value of the domestic currency
c. A decrease in the general price level and a decrease in the value of the domestic currency
d. A decrease in the general price level and an increase in the value of the domestic currency
26. Open market operations refer to activities that:
a. The Central Bank lends to intermediary banks
b. The Central Bank raised the required reserve ratio
c. Buy and sell government bonds of the Central Bank
d. All answers are wrong
27. In the organizational structure of the banking system, the main functions of the Central Bank are:
a. Mobilize deposits and lend to businesses.
b. Supervise the banking system and regulate the money supply.
c. Appoint and dismiss bank leaders.
d. All answers are correct
28. Which of the following situations will reduce the equilibrium interest rate in the market:
a. The Central Bank reduces required reserves.
b. The government increases taxes on the income of high-income earners.
c. The money demand curve shifts to the right.
d. The money supply curve shifts to the left.
29. In the money market, there is a money supply function MS = 3500 and a money demand function
MD = 1000 + 200r + 3Y; Where Y=400 is the total output level of the economy. Thus, the r
(interest rate) of the economy is in equilibrium at:
a. г = 4.5%.
b. г = 5.5%.
c. r= 6.5%.
d. r = 7.5%.
30. Which of the following statements is true about the currency market:
a. The money supply curve is vertical.
b. The money demand curve slopes downward.
c. All answers are correct.
d. The equilibrium interest rate is the intersection of the money supply curve and the money
demand curve.
31. Money is the most liquid asset because:
a. It is itself a means of storing value.
 b. It is itself a unit of accounting.
c. It has intrinsic value in itself.
d. It is itself a medium of exchange
32. If country A's economy uses a precious metal, silver, as its currency, then that economy's
currency:
a. Used as a store of value but not as a medium of exchange.
b. Use as a medium of exchange but not as a store of value.
c. It's commodity money.
d. There is no intrinsic value.
33. 500,000 Vietnamese Dong paper money and gold coins
a. 500,000 Vietnamese Dong paper money is commodity money and gold coins are legal tender.
b. Both are commodity money.
c. 500.000 Vietnamese Dong paper money is legal currency and gold coins are commodity
money.
d. Both are legal tender.
34. During economic downturns, intermediary banks often hold excess reserves compared to the
central bank's required reserve ratio. This action:
a. Increases the money multiplier and increases the money supply.
b. Does not change the money multiplier, but increases the money supply.
c. Reduces the money multiplier and reduces the money supply.
d. Does not change the money multiplier, but reduces the money supply.
35. Ms. Tuyet has $100 in cash in her closet. She took this 100 USD and deposited it in the bank. The
reserve ratio of the banking system is 5%. The created money is:
a. 100 USD.
b. 900 USD.
c. 2000 USD.
d. 1000 USD.
36. If the Central Bank reduces the required reserve ratio and buys government bonds then:
a. Money supply increases and interest rates increase.
b. Money supply decreases and interest rates increase.
c. Money supply increases and interest rates decrease.
d. The money supply decreases and interest rates decrease.
37. Mr. Quang has $100 in cash in his desk drawer. He took this 100 USD and deposited it in the
bank. The reserve ratio of the banking system is 10%. The created money is:
a. 900 USD.
b. 100 USD.
c. 1000 USD.
d. 1900 USD.
38. The operation of adjusting macroeconomic goals by the central bank's mechanism of changing the
money supply is called:
a. Buying and selling government bonds on the open market.
b. Interest rate adjustment policy.
c. All answers are correct.
d. Monetary policy.