Question # 1

Japan's low interest rates in the mid 80's were due to.

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High rates of domestic savings.

A decrease in Japan's exports

Increases in the U.S. deficit

High rates of domestic spending in Japan

The fundamental economic problem faced by all societies is.

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Unemployment

Inequality

Poverty

Scarcity

Which of the following can the government not use directly to control the economy.

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Pay rates within the privates sector

Pay rates in the public sector

Investment in education

Benefits available for the un employed and sick

Demand for primary products is likely to be

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Very sensitive to price

Price elastic

Unit elastic

Income inelastic

To be productively efficient a firm must produce where

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Marginal costs are maximized

Marginal costs are minimized

Average costs are minimized

Average revenue is maximized

Scarcity means that

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We cannot have everything that we might want

We have to make choices between the things we desire.

There are costs to just about any activity we undertake

We must give up some thing in order to obtain other things.

All of the above are correct

Which of the following is a possible government objective as opposed to a policy.

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Lower interest rates

Lower taxation rates

Lower government spending

Lower inflection

According to the quantity theory of money an increase in the money supply is most likely to lead ot inflation if

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The velocity of circulation decreases

The number of transactions decreases

There is deflation

The velocity of circulation and the number of transactions is constant

When internal economics of scale occur

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Total costs fall

Marginal costs increase

Average costs fall

Revenue falls

Equilibrium in the market for good A obtains.

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When there is no surplus or shortage prevailing in the market

Where the demand and supply curves for A intersect

When all of what is produced of A is consumed

All of the above

"Reducing inflation is a more important objective than economic growth" is an example of.

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Normative economics

Positive economics

Objective economics

Reality economics

Normal profit occurs when

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Average revenue equals average variable cost

Marginal revenue equals marginal cost

Average revenue equals marginal cost

Average revenue equals average cost

Unfair competition does not include

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Price cutting

predatory pricing

Cartels

Price fixing

An increase in the costs of production will

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Shift demand out wards

Shift demand in wards

Shift supply out wards so more is supplied at each and every price all other things unchanged.

Shift supply inwards

To anticipate what the economy is going to do next the government will look at.

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Lagging indicators

Flashing indicators

Coincidental iindicators

Leading indicators

Developing economies usually

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Have large industrialized sectors

Are dependent on primary products

Have high levels of wealth

Earn more from exports than is spent on imports

Which of the following is not one of the four Ps in marketing.

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Product

Price

Place

Presence

If injection are less than with drawls at the full employment level of national income there is.

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an inflationary gap

Equilibrium

A deflationary gap

Hyperinflation

Which is the most volatile component of aggregate demand.

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Net exports

Consumption

Investment

Government spending

Economic theory assumes that people

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Act in greedy and selfish ways, without regard for the welfare of others.

Act without regard for their own interests.

Are not motivated by self interest

Are motivated by self interest but still might be concerned for the welfare of others.

The public sector includes.

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Investors owning companies

Government ownership of assets

Market forces of supply and demand

All trade via barter

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