Question # 1

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 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 multiplier accelerator model assumes _______ depends on.

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Consumption, expected future profits.

Investment, interest rates.

Investment expected future profits.

Stock building, interest rates.

Under floating exchange rates, expectations of higher interest rates are likely to cause an __________ of the exchange rate.

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Depreciation

Appreciation

fall

Devaluation

A tariff causes domestic firms to __________ and consumers to

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Overproduced, under consume

overproduce , overconsume

Underproduce, under consume

underproduce, overconsume

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

In an economy, measuring total value (1) added, total value(2) spending on final goods and 3 total factor earning gives the result that.

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3>2>1

3 +2>1

3<2<1

Any measure can be larger or smaller than any other

International specialization takes place because of.

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Differences in technology

Differences in factor endowments

Scale economies

All of the above

Leakages from the circular flow are____ and _____

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Investment savings, government expenditure

Saving , taxes net of subsidies, imports

Consumption, investment , government expenditure.

Consumption, taxes, impports

Economics is the study of

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Production technology

Consumption decisions

How society decides what how and for whom to produce

The best way to run society

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.

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

Government may contribute to inflationary pressure on account of building up large.

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Numbers of employees

Welfare plans

Budget deficits

Expenditure.

If both Marginal cost and marginal revenue increase, a firm.

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Should increase output

Should reduce output

Will require further information on how to respond

should not change output

For perfect competition ot work there must be

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Many buyers and sellers

A standard product

Free entry and exit

All of the above

For a competitive firm its short run supply curve is ________ and its long run supply curve is.

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SMC , LMC

SMC above SAVC, LMC above LAC

SMC below SAVC, LMC above LAC

SMC Below SAVC, LMC below LAC

LDC's often have a comparative advantage in the production of.

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Primary products

Intermediate products

Manufactured products

Financial services.

In the economy when a steel producer sells steel to car producer it is regarded as.

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A final good

An intermediate good

an injection

a leakage

Output fell sharply in the transition economies because.

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Banks were undoable to function

There was little corporate control

Vital infrastructure was missing

All of the above

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

We would normally expect the size of the labour force to be ____ than the number of workers willing to accept job offers at any real wage rate.

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Smaller

Larger

the same size

None of these

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