28. Using the information in the table above, calculate the government's budget deficit or surplus.

(A) -$4
(B) -$10
(C) $2
(D) $4

29. In the above figure, suppose point A is the original equilibrium. If there is an increase in the quantity of money that shifts the aggregate demand curve to AD1, the new short-run equilibrium is given by point _______. (A) A (that is, the equilibrium does not change). (B) B. (C) C. (D) D.

30. In the above figure, suppose point A is the original equilibrium. If there is an increase in the quantity of money that shifts the aggregate demand curve to AD1, in the long run the price level is _______. (A) 120. (B) 100. (C) 110. (D) 90.

31. If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed and 150 million employed, the labor force participation is _______. (A) 6.67 percent. (B) 69.6 percent. (C) 50 percent. (D) 23.3 percent.

32. A classical economist believes that _______. (A) the economy is self-regulating and always at full employment. (B) the economy is self-regulating and will normally, though not always, operate at full employment if fiscal policy is not erratic. (C) the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic. (D) if the economy was left alone, it would rarely operate at full employment.

33. Economic growth occurs as a result of all of the following EXCEPT _______. (A) growth of capital. (B) technological progress. (C) more labor hours. (D) less saving.

34. Which of the following are part of a commercial bank's reserves?  I. cash in the bank's vaults II. loans  III. cash in checking accounts (A) I, II and III (B) I only (C) I and II (D) I and III

35. According to the above balance sheet, the required reserve ratio for the ABC Bank is _______. (A) 20 percent. (B) 10 percent. (C) 15 percent. (D) 5 percent.

36. In the above figure, which of the following curves represents the long-run Phillips curve? (A) 1 (B) 2 (C) 4 (D) 3

37. If the natural rate of unemployment increases, then the long-run Phillips curve _______ and the short-run Phillips curve _______. (A) shifts leftward； shifts rightward (B) shifts rightward； shifts rightward (C) shifts rightward； shifts leftward (D) does not shift； shifts rightward

38. In the above figure the economy is initially at point A on aggregate expenditure curve AEo. Suppose investment decreases. As a result _______. (A) there is a movement along AE₁ to a point such as C. (B) the AE curve shifts upward to a curve such as AE2. (C) there is a movement along AE₁ to a point such as B. (D) the AE curve shifts downward to a curve such as AE1.

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