Question # 1

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

Real business cycle are cycles in

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Potential output

Actual output

Real output

International trade

Starting from a position of internal and external balance a reduction in aggregate demand will cause a current account.

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Deficit

Surplus

Revaluation

Devaluation

Comparing a monopoly and a competitive firm the monopolist will.

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Produce less at a lower price

Produce more at a lower price

Produce less at a higher price

Produce less at a lower price

One of the transmission mechanism of monetary policy is through consumer house hold wealth.___________ and consumption.

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rise, increases, increases

rise, falls, increases

rise, increases, falls

rise, falls, falls

For given government spending and taxation the government budget deficit will grow in __________ and decline in _________

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booms, booms

recession, recession

booms, recessions

recessions, booms

All of the following are benefits of the single market except.

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It allows countries to exploit their comparative advantage, more fully

Firms could more readily exploit economies of scale

It intensified competition

It is easier book holidays in member countries.

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 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

Expansionary fiscal policy in the classical model will cause aggregate demand to ______ potential output.

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Exceed

Fall below

Fluclaute around

Remain equal to.

When we know the quantity of a product that buyers wish to purchases at each possible price we know.

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Demand

Supply

excess demand

Excess supply

International difference in opportunity costs lead to countries acquiring.

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Comparative advantage

High exchange rates

Trade exchange rates

Trade barriers

Higher export demand _______ output and a higher MPZ______ output..

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Reduces, reduces

Reduces, increases

Increases, reduces

increases, increases

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 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

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

The value of an asset depends upon

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Its scrap value

Its depreciation

The present value of the failure stream of income it can earn.

the cost of loans

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

The multiplier is calculated as.

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1(1-MPC)

1/MPS

1/MPC

a or b

The Keynesian model is a good guide to ______ behavior and the classical model describes behavior in.

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^{Long run, short run}

Flexible, imperfect markets

Short term , long run

Ong run, imperfect market.

All of the following are types of imperfect competition except

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Monopolistic competition

Oligopoly

Monopoly

Unfair competition

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