Question # 1

A significant increase in the government budget deficit is likely to.

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Reduce injections into the economy

Reduce national income

Move the economy away from full employment

Boost aggregate demand

A deflationary policy could include

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Increasing injections

Reducing taxation rates

Reducing interest rates

Reducing government spending

A contraction in supply occurs when

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Demand shifts out wards

The supply curve shifts inwards

The quantity supplied falls when the price falls

The supply curve shifts outwards

Which does the government not control directly.

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Spending on health

spending on defense

Firm's investment decisions

spending on education

When referring to economic growth we normally refer to.

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Growth in actual real per capita output

Growth in potential real per capita output

Growth in actual nominal per capita output

Growth in potential real per capita output

A welfare less occurs in monopoly where

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The price in greater than the marginal cost

The price is greater than the marginal benefit

The price is greater than the average revenue

Has the right to investigate monopolies and will assess each one on its own mertis

In economics we ofthe say that a particular event will occur "as long as other things stay the same. " The conduction that other thing saty the same is also called.

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Ceteris paribus

Marginal decision making

Incentives

Secondary effects

Capital, as economists use the term.

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Is the money the firm spends to hire resources

Is money the firm raises from selling stock

Refers to the process by which resources are transformed into useful forms

Refers to things that have already been produced that are in turn used to produce other goods and services.

Increased levels of spending on imports

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shift aggregate supply to the right

Shift aggregate supply to the left

Shift aggregate demand to the right

Shift aggregate demand to the left

According to classical models the level of employment is determined primarily by

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Interest rates

The level of prices

The level of aggregate supply in the economy

The level of aggregate demand for goods and services

The bowed shape of the production possibilities curve illustrtres.

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The law of increasing marginal cost

the production in inefficient

That production is inattainable

The demand is relatively inelastic

Less Developed countries lend to have

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A high average age

A slow population growth rate

High life expectancy

A low literacy rate

A public good will

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Be underprovided in the free market

Be overprovided in the free market

Not be provided in the free market

Has no opportunity cost

An increase in costs will

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Shift aggregate demand

Shift aggregate supply

Reduce the natural rate of unemployment

Increases the productivity of employees

Open market operations occur when the government.

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Reduces the interest rate

Buys and sells bonds and securities

Increases taxation

Increases the exchange rate

Macro economics deals with

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Only the decisions made by individuals and their results.

Only the decisions made by businesses and their results.

Mostly large scale decisions made by countries and governments, and their results.

Only the decisions made by individuals but not the results.

Which of the following rights be a scarce good.

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Love

faith

Self control

All of above

As the MPS increases, the multiplier will

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Increase

Either increase or decrease depending on the size of the change in investment

Remain constant

Decrease

Why is the law of diminishing marginal returns true.

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specialization and division of labor

Spreading the average fixed cost

Limited capital

All factors being variable in the long run

With a positive externality

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There is under consumption in the free market

There is over consumption in the free market

The government may tax to decrease production

Society could be made off if less was produced

In the long term a firm will produce provident the revenue covers.

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Fixed costs

Variable cost

Total costs

Revenue

The marginal revenue curve in monopoly

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Equals the demand curve

Is a parallel with the demand curve

Lies below and converges with the demand curve

Lies below and diverges from the demeaned curve

Which of the following is necessary for a natural monopoly.

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Economies of scale

A high proportion of the total cost is the cost of capital goods

The market is very small

All of the above

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