Question # 1

With fixed exchange rates and no private currency flow, when the central bank buys domestic currency the domestic money supply is.

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Increased

Unaffected

Reduced

All of the above

M4 is a _________ measures of money and includes deposits at both _____________ and

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Narrow, banks, building societies

Wide, banks, insurance companies

narrow, banks, insurance companies

Wide, banks, building societies.

Fiscal policy is weak under floating exchange rates as fiscal expansion.

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Crowds out imports

Crowds out public consumption

Crowds out exports

Reduces the budget deficit

The cost of using capital services is the

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wage rate of capital

Interest charges

Marginal capital cost

Rental rate for capital

Nominal GNP measures income

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At the present time

Corrected for tax changes

Corrected for changes in interest rates

At current prices

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

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

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inflationary expectations

Unemployment

The inflation rate

Wage rates

If goods are exported for less than society's marginal production cost and the marginal benefit to domestic consumers, it is likely that they benefit from.

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An import subsidy

A quota

Comparative advantage

An export subsidy

The single European Act committed_ governments to a ___ in 1992

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European union, single market

Western European, single currency area

European union, single currency area

Western European, single market

An increase in consumer income will increase demand for a __________ for decrease demand for a.

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Substitute good interior good

Normal good, interior good

Interior good, normal good.

Normal good, complementary good.

A rise in the real exchange rate will __ the competitiveness of the domestic economy.

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Increase

reduce

do nothing do

all of these

A production technique is technically efficient if.

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Output is maximized

Input are minimized

there is no way to make a given output using less of one input and no more of the other inputs.

costs are minimized

During periods of rising inflation and rising interest rates we expect the demand for real cash to.

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rise

fall

not change

fluctuate

If as result of householder wish to save more there is a change in equilibrium income and no change in equilibrium saving this as an example of.

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Market imperfection

The law of diminishing returns

The paradox of thriff

Market failure

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

If the central bank buys financial securities in the open market to increase the monetary base, this is an example of.

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Lender of last resort

Financial intermediation

Open market operations

Financial regulation.

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

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Numbers of employees

Welfare plans

Budget deficits

Expenditure.

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

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Reduces, reduces

Reduces, increases

Increases, reduces

increases, increases

the Maastricht criteria for entry to the EMU are that applicants should have

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Low inflation

Low interest rates

Stable nominal exchange rate

All of the above

In the UK under a _________ of the labour force belong to a trade union.

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Quarter

Third

Half

Three quarters

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