Question # 1

Economic growth may depend upon __________ and_________

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Population size , x -efficiency

Population age distribution, education

Population growth, education

Population growth, technical progress

If a person thinks they are better off after a 10% wage increase, and all prices have risen 10%, then they are experiencing.

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Inflation

A supply shocks

Crowding out

Inflation illusion

In the UK in recent years, union membership has ______ and days of work lost because of strikes has.

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Grown, declined

declined, declined

declined, grown

grown , grown

The price elasticity of demand measures

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The responsiveness of quantity demanded to a change in prie.

How far a demand curve shifts

A change in price

A change in quantity demanded

All of the following are parts of the business cycle except.

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Boom

slump

Recovery

Acceleration

The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the.

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Sun spect theory

Multiplier accelerator model

Solow theory

New classical theory

All of the following are type of monetary policy except

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A nominal money stock target

A balances budget

An inflation target

The pursuit of a target real interest rate

When the S/L exchange rate rises the pounds______ and whent he S/L rate falls the pounds.

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depreciates, appreciates

revalues, devalues

appreciates, deprecates

becomes more expensive, becomes cheaper

The growth rate of economics tend to converge because._________ is easier when capital per worker is low and because of_____

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capital widening, technical innovation

Capital widening, catch up in technology

Capital deepening, technical innovation

Capital deepening, catch up technology.

If two firms doing the same thing in the same industry join together this is known as a.

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vertical merger

Horizontal merger

Conglomerate merger

Hostile takeover

Taxes create a wedge between the sales price and purchase price that prevents the price system equaling _________ and

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Marginal costs, marginal benefits

Demand, supply

Marginal cost, marginal revenue

Marginal cost, average cost

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

In an open economy leakages to imports ______ the value of the multiplier.

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Reduce

Increase

do not change

None of these

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

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

A tariff causes domestic firms to __________ and consumers to

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Overproduced, under consume

overproduce , overconsume

Underproduce, under consume

underproduce, overconsume

In the circular flow we would expect leakages to __________ injections.

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equal

be less than

by greater than

Be less or greater than

Real business cycle are cycles in

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Potential output

Actual output

Real output

International trade

In the event of an increase in the international price of oil that encouraged the central bank to accept lower real interest rates, inflation would most likely.

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Fall

Increases

Remain the same

Fluctuate

The allocation of resources is not efficient it

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The marginal cost of production does not equal society marginal benefit

The distribution is inequitable

Economic growth is low

Unemployment is high

A firm that breaks even after all economic costs are paid is earning.

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Economic profit

Accounting profit

Normal profit

Supernormal profit

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