Question # 1

Land will be allocated between competing uses so that.

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Housing gets priority

Industry gets priority

Faming gets priority

The equilibrium rental rate equilibrium total demand with supply

If banks and the private sector decide to hold less cash the money multiplier will be.

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Unchanged

Larger

Smaller

unstable

The key issues of macroeconomics are

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Unemployment

Inflation

Economic growth

All of the above

When we refer to the hidden economy we mean unrecorded income owing to.

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Tax evasion

Poor statistics

The lags between statistical collection and publication .

Smuggling

An optimal tariff is one which reduces imports to the level at which ___ equals

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imports , exports

The balance of trade, zero

The demand for currency, the supply of currency

Social marginal cost social marginal benefit

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.

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

If desired spending in the economy exceeds income we would expect.

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House hold to save more

Firm to produce less

Firms is produce more

the MPC to change

Human capital can be described as.

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The tools used by workers to entrances productivity

a persons inherited abilities.

The stock of expertise accumulated by a worker

Education

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.

Extremality's arise because there is a divergence between ____ and _

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Private costs, private benefits

Private costs, social costs of benefits

Social cost, social benefit

Insiders, outsiders

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

If the government increase spending and raises taxes by just enough to finance the increase it will.

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Leave output unchagned

Increase output

Reduce output

Increase the MPC

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

The costs of inflation are

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Shoe leather costs

Menu costs

Income redistribution

All of the above

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

A supply curve is directly affected by

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Technology

Input costs

Government regulation

All of the above

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

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

A competitive equilibrium is Pareto efficient because.

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Producers are price takers

Consumers and producer's face the same prices

Marginal costs and benefits are equal

All of the above

Aggregate demand in an economy trading internationally with a government sector can be written s.

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AD = C+1

AD = C + 1+ G

AD = C +1+G+X+Z

AD+C+1+G+X-Z

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