Sheet 3 - Introduction to Macroeconomics Tutorial Sheet...

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Introduction to Macroeconomics Spring 2011 Tutorial Sheet three Conflict in Macroeconomic Objectives Question One: Indicate whether the following statements are “True” or “False”: 1. The four objectives of improving a country’s economic performance are: increasing GDP, increasing unemployment rate, decreasing inflation and having a positive balance of payment. 2. In developing countries, increasing production (GDP) might results in an increase in the balance of payment (BOP) deficit. 3. Causes of inflation can be due to a decrease in the consumer demand and an increase in the cost of production. 4. According to Philip’s cure, employment and interest rates have an inverse relationship. 5. Stagflation is the result of high inflation and high unemployment rates Question Two: 1. Which of the following is one of the main objectives in any economy? a. decrease employment rate b. have price level equal zero c. Increase output, i.e. GDP d. increase imports 2. A trade deficit results from
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Sheet 3 - Introduction to Macroeconomics Tutorial Sheet...

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