Question # 1

The equilibrium price clears the market it is the price at which.

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Everything is sold

Buyers spend all their money

Excess demand is zero

c and d

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.

Floating exchange rates are __ in the short run

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Stable

Volatile

Predictable

Depreciating

When real income increases, other things equal we fan expect the demand for real money holdings to.

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Fall

Not change

Increase

Decrease

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 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

All of the following are types of imperfect competition except

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Monopolistic competition

Oligopoly

Monopoly

Unfair competition

Possible causes of involuntary unemployment are

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Minimum wage agreements

Trade unions

Scale economies

All of the abvoe

The retail price index is used to.

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Construct price lists

Compare shop prices

Measure changes in the cost of living

None of the above

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 impossibility of negative gross investment provides a______ to fluctuations in.

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Celling, stock building

Celling, capital prices

floor , output

floor , the capital output ratio

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

Short run equilibrium output means that aggregate demand _ actual output

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is less than

equals

is greater than

fluctuates around

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

Top footballers land to earn more than lecturers because.

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Footballers give more entertainment

Lecturers are lazy

The labour markets are imperfect

Top footballers are relatively scarce in relation to lecturers

Aggregate demand without a foreign sector is the sum of.

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c+1

C+G

1+G

C+!+G

If a person thinks they are better off after a 10% wage increase, and all prices have risen 10%, then they are experiencing.

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Inflation

A supply shocks

Crowding out

Inflation illusion

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

A dominant strategy is.

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A winning strategy

A losing strategy

A players best strategy when moving fist

a player's best strategy whatever the strategies adopted by rivals

If the consumption of a good by one person does not reduce the quantity available by other and nobody cna be easily excluded from consumption, we are referring to a.

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Private good

Merit good

Public good

Abundant good

A profit maximizing firm will hire labor until _______ equal the

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Marginal revenue, marginal cost

Long run marginal revenue, long run marginal cost

Labour output ratio, capital output ratio

Marginal cost of labour, marginal revenue product

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