Question # 1

Efficiency wages are_______ that raise

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Low wages , employment

High wages, labor supply

High wages, productivity

High wages, employment

The abolition of income tax would probably ________ the number of workers in employment and____________ the equilibrium. rate of unemployment.

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increase ; decrease

increase ; increase

reduce ; increase

reduce ; reduce

The level of the equilibrium exchange rate offsets international difference in.

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Comparative advantage

Absolute advantage

Opportunity cost

Relative costs

The equilibrium inflation rate is determine by the intersection of __________ and ___

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demand, supply

IS , LM

AD, AS

Labour demand, labour supply

In the EMU a country's competitiveness can change because of.

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Interest rate adjustment

Central bank intervention i the forex

Domestic wage and price adjustment

Devaluations

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

The costs of inflation are

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Shoe leather costs

Menu costs

Income redistribution

All of the above

All of the following are type of monetary policy except

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A nominal money stock target

A balances budget

An inflation target

The pursuit of a target real interest rate

Possible causes of involuntary unemployment are

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Minimum wage agreements

Trade unions

Scale economies

All of the abvoe

With fixed exchange rates and no private currency flow, when the central bank buys domestic currency the domestic money supply is.

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Increased

Unaffected

Reduced

All of the above

The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve.

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At their lowest points

When they are declining

When they are increasing.

When marginal revenue is 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.

If I keep some money available in case I see a bargain this is an example of.

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Asset demand for money

Transactions demand for money

Token demand for money

Precautionary demand for money

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

In the short run the level of floating exchange rates is determined mainly by.

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Interest rates

Competitiveness

Trade

Speculation

The total multiplier for the economy will reflect.

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MPC and MPT

MPT and MPZ

MPC and MPZ

MPC, MPT and MPZ

If goods are exported for less than society's marginal production cost and the marginal benefit to domestic consumers, it is likely that they benefit from.

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An import subsidy

A quota

Comparative advantage

An export subsidy

Higher export demand _______ output and a higher MPZ______ output..

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Reduces, reduces

Reduces, increases

Increases, reduces

increases, increases

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

LDC's often have a comparative advantage in the production of.

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Primary products

Intermediate products

Manufactured products

Financial services.

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

Micro economics is conceded with

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The economy as a whole

The electronics industry

The study of individual economic behavior

the interactions within the entire economy

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