Question # 1

Economic growth can be measured by

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The CPI

The CBI

GDP

MPC

Supply is likely to be more price elastic.

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In the short run rather than the long run

If factors of production are relatively immobile between industries.

If there are very few producers

If it is easy to expand output

In the long run in perfect competition

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Price = average= cost = marginal cost

Price = average cost = total cost

The price covers fixed cost

total revenue = total variable cost

A higher GDP per capita may not mean that the quality of life has really improved because.

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It measures wealth not income

It measures Gross Domestic product

It does not measure the quality of the items produced

it is only measured every five years

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

In the long run in perfect competitiion

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the price equals the total revenue

Firm are allocatively inefficient

Firms are productively efficient

the price equals total cost

An increase in aggregate demand is more likely to lead to demand pull inflation if.

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Aggregate supply is perfectly elastic

Aggregate supply is perfectly inelastic

Aggregate supply is unit elastic

Aggregate supply is relatively elastic

To adjust from gross National Product to Net National Product

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Deduct deprecation

Deduct indirect taxes

Deduct subsidies

Add inflation

An increase in the costs of production will

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Shift demand out wards

Shift demand in wards

Shift supply out wards so more is supplied at each and every price all other things unchanged.

Shift supply inwards

The hypothesis that people know the true model of the economy and that they use this model and al available information to form their expectations of the future is the

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Relational expectations hypothesis.

Active expectations hypothesis

Static expectations hypothesis

Adeptive expectations hypothesis

The index used most often to measure inflation is the

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Consumer price index

Wholesale price index

Student price index

Producer price index

To adjust GDP from market prices to factor cost.

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Add indirect taxes

Subtract subsidies

Deduct indirect taxes and subsides

Deduct indirect taxes and add subsides

The demand for a product would be more inelastic.

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The greater is the time under consideration

The greater is the number of substitutes available to buyers

The less expensive is the product in relation to incomes

all of the above.

If the price elasticity of demand for a product in market A is -0.2 and in market B is -3 a price discriminator will charge.

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The higher price in market A

The higher price in market B

The same price in both markets

There are many sellers

If the price is less than the average cost but higher than the average variable costs.

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The firm is making a loss and will should own in the short term.

The firm is making a profit.

The firm is making a loss but will continue to produce in the short term

The firm is making a loss and is making a negative contribution to fixed costs

Say's law states that

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Supply creates its own demand

Demand creates its own supply

There is no such things as a free lunch

Macro economics policy activism is essential to ensure full employment.

Finding a partner to work with abroad is called a.

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Takeover

Merger

Acquisition

Joint venture

An expansionist fiscal policy could include

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Lower interest rates

Increased lending by the banks

An increase in corporation tax

An increase in discretionary government spending

Over time the price of primary products tends to fall because.

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Demand is income elastic

Supply is income elastic

Of outward shifts in supply

Demand is price elastic

The resources in the economy do not include.

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Demand

Land

Labor

Capital

The diamond water paradox can be explained by suggesting that the price of a product is determined by.

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Consumer incomes

Its marginal utility

Consumer surplus

Diminishing marginal utility

A significant increase in the government budget deficit is likely to.

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Reduce injections into the economy

Reduce national income

Move the economy away from full employment

Boost aggregate demand

Rapid increases in the price level during periods of recession or high unemployment are known as.

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Slump

Stagnation

Stagflation

Inflation

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