Determine whether following statements are true or false. Right answer is worth

Question

Determine whether following statements are true or false. Right answer is worth 0.5 points and wrong answer costs 0.5 points. The total points cannot be negative however. There is a single right answer to each item. 1. Central banks typically use changes of reserve requirements in their day-to-day control of the money supply. 2. Gross national product of Finland includes profits from a plant which is 3. A good is an inferior good if the substitution effect dominates the income 4. Unemployment rate means the ratio of unemployed people to working . Current account is by definition equal to net exports located in China but owned by a Finnish firm effect. age population 6. The government purchases of national income accounts include e.g. defense costs, costs of public education and unemployment benefits. )Ricardian equivalence does not hold if there is proportional taxation of labor income 7 7. B)Productivity growth does not affect growth of the economy in the Solow mode

Explanation / Answer

1. False

For day to day control of money supply, central banks indulge into open market operations.

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