Question # 1

According to classical models the level of employment is determined primarily by

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Interest rates

The level of prices

The level of aggregate supply in the economy

The level of aggregate demand for goods and services

Injection are

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Assumed to be exogenous

Assumed to be a function of national income

Decrease aggregate demand

Decrease the investment into an economy

There are three fundamental questions every society must answer Which of the following is one of these questions.

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What goods and services are to be produced.

How are the good and services to be produced.

Who will get the goods and services what are produced.

All of the above

Finding a partner to work with abroad is called a.

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Takeover

Merger

Acquisition

Joint venture

If marginal cost is positive and falling.

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Total cost is falling

Total cost is increasing at a falling rate

Total cost is falling at a falling rate

Total cost is increasing at an increasing rate.

Why is the law of diminishing marginal returns true.

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specialization and division of labor

Spreading the average fixed cost

Limited capital

All factors being variable in the long run

If firms join together to set prices and quantities this is known as what.

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Interaction

Conglomerate

Collusion

Integration

Barriers to entry do not include

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Patents

Internal economics of scale

Mobility of resources

High investment costs

Which of the following is not an obvious or direct determinant of a country's imports.

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Real exchange rate

Income

Tariff rates

Interest rate

Profit making is basic motive in.

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Socialism

Mixed economy

Communism

^Capitalism

Earning from primary products are often unstable because.

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Demand is price elastic

Supply is price elastic

Supply conditions are relatively stable

Supply conditions are unstable

Demand for labour is more likely to be wage inelastic if.

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Wages are a small proportion of total costs

Demand for the final product is price elastic

It is easy to replace labour

Capital is a good substitute forlabour

If input price adjusted very slowly to output prices, the Phillip's curve would be.

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Downward sloping

Vertical or nearly vertical

Upward sloping

Horizontal or nearly horizontal

Capital, as economists use the term.

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Is the money the firm spends to hire resources

Is money the firm raises from selling stock

Refers to the process by which resources are transformed into useful forms

Refers to things that have already been produced that are in turn used to produce other goods and services.

Open market operations occur when the government.

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Reduces the interest rate

Buys and sells bonds and securities

Increases taxation

Increases the exchange rate

The concept of "Interdependence of markets" can refer to the interdependence between.

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Two or more factor markets

Goods and factor markets

Goods markets

All of the above

Profit is measured by

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Revenue - Fixed costs

Fixed cost + revenue

Revenue - sales

Revenues - total costs

Which of the following is not an argument for protectionism.

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To protect infant industries

To increase the level of imports

To protect strategic industries

To improve the balance of payments

Investment is an out stable element of aggregate demand because is depends heavily on.

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Government policy

Expectations

National income

Historic trends

Which of the following is a characteristic of pure monopoly.

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one seller of the product

Low barriers to entry

Close substitute products

Perfect information

An increase in productivity should.

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Lead to a contraction of supply

Lead to an expansion of supply

Lead to a shift in supply outwards

Lead to higher equilibrium and lower equilibrium quantity.

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