Question # 1

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

Adding up the quantities demanded of a good by different people facing the same price gives us the.

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Supply curve

Market demand curve

Demand curve

Market supply curve

The long run Philips curve is _________ at the ______

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Horizontal natural rate of inflation

Horizontal , natural rate of unemployment

Vertical , natural rte of inflation

Vertical , equilibrium rate of unemployment.

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

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Monetary growth

Better technology

More capital

higher labour supply

The participation rate in the labour force is affected by

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Higher real wages

Lower fixed costs of working

Lower non labor income

All of the above

a demand curve can shift because of changing.

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Incomes

Prices of related goods

Testes

All of the above

If my neighbor burns garden waste causing my house to fil with smoke this is an example of.

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A production extremality

A second best solution

Transaction costs

A consumption externality

Efficiency wages are_______ that raise

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Low wages , employment

High wages, labor supply

High wages, productivity

High wages, employment

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

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Unchanged

Larger

Smaller

unstable

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 demand is _______ then price cuts will ________ spending.

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Inelastic, increase

Elastic, increase

Elastic, decreases

None of the above

The AD schedule indicates that______ inflation is associated with______ output.

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higher , lower

Higher , higher

Lower , lower

zero ,zero

Economic transition involves high inflation because ______ and _____

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High monetary growth, high wages.

High budget deficits, devaluation

High monetary growth, devaluation

Prices surge from an artificially low level to their equilibrium level the inflation tax is required as source of government revenue.

In the UK in recent years, union membership has ______ and days of work lost because of strikes has.

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Grown, declined

declined, declined

declined, grown

grown , grown

The real value can be derived from a nominal value by

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Adjusting changes over time

Adjusting for data collection errors

Adjusting for population changes

Adjusting for changes in prices

The primary function of a bank is to.

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Control the money supply

Provide notes and coins for trade

Make a profit

Provide a chequeen clearing system.

The price elasticity of demand measures

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The responsiveness of quantity demanded to a change in prie.

How far a demand curve shifts

A change in price

A change in quantity demanded

Market failure may arise because of.

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Imperfect competition

Taxation

Externalities

All of the above

When investment is assumed to autonomous the slope of the AD schedule is determined by the.

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Marginal propensity to invest.

disposable income

Marginal propensity to consume

Average properisity to consume

A straight line diagram can be drawn knowing the _______ and _____

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Vertical axis and horizontal axis

Intercept and slope

Scale and slope

Intercept and scale.

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

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