Question # 1

In the neoclassical theory of growth a higher saving rate leads to.

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A higher growth rate

A fluctuating growth rate

A lower growth rate

No change in the growth rate

Positive cross elasticities suggest that goods are ______ and negative cross elasticities that goods are.

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Substitutes, interior

Normal, complements

Substitutes, complements

Normal , interior

If some body is prepared to work at the going wage rate but cannot find work than they are victims of.

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Voluntary unemployment

Classical unemployment

Frictional unemployment.

All of the above

In the absence of international capital controls, central banks set ______ to provide the correct incentive for speculators

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Money supply targets

Income policy

Interest rates

Inflation targets

We cannot say whether one allocation of resources is better than another allocation because.

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some people cant count

Some people may not be permanent residents

Not all economic activity is legal

We cant make value judgements to compare different people welfare.

The real value can be derived from a nominal value by

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Adjusting changes over time

Adjusting for data collection errors

Adjusting for population changes

Adjusting for changes in prices

The main cause of different relative costs between countries are.

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Relative factors competition

Relative factor mobility

Relative factor substitution

Relative factor endowments

If one country, with floating exchange states, has higher inflation than its competitors, we would expect its exchange rate to.

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Appreciate

Depreciate

Revalue

be in short supply

If banks and the private sector decide to hold less cash the money multiplier will be.

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Unchanged

Larger

Smaller

unstable

In the ERM, each country fixed ___ against each other ERM participant collectively the group._____ against the rest of the world.

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A nominal exchange rate, floated

A real exchange rate, pegged

a purchasing power parity, pegged

a real exchange rate, floated

The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve.

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At their lowest points

When they are declining

When they are increasing.

When marginal revenue is zero

The participation rate in the labour force is affected by

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Higher real wages

Lower fixed costs of working

Lower non labor income

All of the above

The most important source of wage differentiate are.

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Reginal variation

Unionization

Relative danger

Skills

import substitution is the replacement of ________ by domestic production under the protection of.

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exports, subsidies

Exports, patents

imports, high tariffs or import quotes

Imports, subsidies

Market failure may arise because of.

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Imperfect competition

Taxation

Externalities

All of the above

A good example of a public good is.

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Public transport

National defense

The national health service

Rail transport

The costs of inflation are

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Shoe leather costs

Menu costs

Income redistribution

All of the above

The short run Philips curve can shift in response to changes in

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inflationary expectations

Unemployment

The inflation rate

Wage rates

The AD schedule indicates that______ inflation is associated with______ output.

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higher , lower

Higher , higher

Lower , lower

zero ,zero

The key issues of macroeconomics are

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Unemployment

Inflation

Economic growth

All of the above

The opportunity cost of a good is.

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The time lost in finding it

The quantity of other goods sacrificed to get another unit of that good

The expenditure on the good

The loss of interest in using savings

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