Question # 1

Injection into the circular flow are _________ and _______

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Consumption, investment, exports

Investment exports, transfer payments

Investment government expenditure, exports.

Taxes, exports, transfer payments.

At the intersection of AD and AS equilibrium is achieved in.

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The goods market

The money market

The labour market

All of the above

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 AD schedule indicates that______ inflation is associated with______ output.

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higher , lower

Higher , higher

Lower , lower

zero ,zero

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

If a country has a burden of debt it cannot sustain it can.

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Reschedule debt

Get a loan from an international organization

Default on the loan

Any of the above

Bank create money by

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Printing it

Issuing debit cards

Accepting chequeens

Lending out part of their deposits

In Nash equilibrium each player chooses the best strategy.

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Assuming other players move first.

Dominated by the other players

Given the strategies of other players

That is a credible threat

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.

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

A competitive firm produces a level of output at which.

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Price is greater than marginal cost

Price equals marginal cost

Price is less than marginal cost

None of the above

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

Real GNP measures income

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Including non market activities

Adjusted for inflation

Including externalities

Including tax evasion

A monopoly may be self perpetuating because profits may be used for

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research

Cost saving

Technical advance

All of the above

Real business cycle are cycles in

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Potential output

Actual output

Real output

International trade

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

In the classical model, potential output can not be increased by

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Monetary growth

Better technology

More capital

higher labour supply

An upward shift in marginal cost ___________ output and an upward shift in _____ marginal revenue __ output.

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Reduce , reduce

Reduce , increase

Increased, increased

Increases, reduces

Marginal revenue is the ________ when output is.

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Change in average revenue, inversed.

change in total revenue, increased by one unit

change in average revenue, increased by one unit

Change in total revenue, incresed.

International difference in opportunity costs lead to countries acquiring.

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Comparative advantage

High exchange rates

Trade exchange rates

Trade barriers

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

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