Question # 1

In Nash equilibrium each player chooses the best strategy.

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Assuming other players move first.

Dominated by the other players

Given the strategies of other players

That is a credible threat

The most important source of wage differentiate are.

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Reginal variation

Unionization

Relative danger

Skills

We would normally expect the size of the labour force to be ____ than the number of workers willing to accept job offers at any real wage rate.

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Smaller

Larger

the same size

None of these

Starting from a position of internal and external balance a reduction in aggregate demand will cause a current account.

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Deficit

Surplus

Revaluation

Devaluation

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

The multiplier tells us how much __________ chagnes after a shift in.

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Consumption, income

Investment , output

Savings, investment

output, aggregate demand

The firms long run output decision will be where.

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Long run average cost a lowest

Marginal revenue equals output

Marginal revenue equals long run marginal cost

Marginal cost equals output

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.

A fixed exchange rate, plus perfect capital mobility _______ the scope for monetary policy.

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Enhances

Undermines

Encourages

Facilitates

When we know the quantity of a product that buyers wish to purchases at each possible price we know.

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Demand

Supply

excess demand

Excess supply

The multiplier accelerator model assumes _______ depends on.

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Consumption, expected future profits.

Investment, interest rates.

Investment expected future profits.

Stock building, interest rates.

When a market is contestable , incumbent firms must.________ to avoid the entry of new competitors.

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Behave like competitive firms

Agree to act together

Differentiate their products

Practice price discrimination

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

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

The growth rate of economics tend to converge because._________ is easier when capital per worker is low and because of_____

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capital widening, technical innovation

Capital widening, catch up in technology

Capital deepening, technical innovation

Capital deepening, catch up technology.

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

In the ERM, each country fixed ___ against each other ERM participant collectively the group._____ against the rest of the world.

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A nominal exchange rate, floated

A real exchange rate, pegged

a purchasing power parity, pegged

a real exchange rate, floated

An advocate of the classical model of the economy would claim that unemployment a created when the ___________ is above its equilibrium level in the.

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Price level, agregate economy

Tax rate, government ebudget

Wage rate, labour market

Interest rate, market for loanable funds

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.

We cannot say whether one allocation of resources is better than another allocation because.

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some people cant count

Some people may not be permanent residents

Not all economic activity is legal

We cant make value judgements to compare different people welfare.

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