Question # 1

Moral Hazard means that the act of insuring __________ that the desired outcome will occur.

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Reduces the likelihood

Increase the likelihood

Guarantees

None of the above

All of the following are parts of the business cycle except.

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Boom

slump

Recovery

Acceleration

In an open economy leakages to imports ______ the value of the multiplier.

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Reduce

Increase

do not change

None of these

The imposition of a tariff causes consumption to _______ and imports to.

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rise , rise

fall , rise

fall , fall

rise , fall

A current account deficit means that a country may.

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Reduce its stock of foreign assets

Increases its stock of foreign assets

Increases its savings

Increases its foreign currency reserves.

A rise in the real exchange rate will __ the competitiveness of the domestic economy.

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Increase

reduce

do nothing do

all of these

A supply curve is directly affected by

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Technology

Input costs

Government regulation

All of the above

In a fixed exchange rate regime, the central bank will intervene by __ pounds to ______ the exchange rate.

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Selling, increase

buying , increase

selling, reduce

both b and c

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

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

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Primary products

Intermediate products

Manufactured products

Financial services.

The business cycle describes fluctuations in output around the.

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Trend path of output

Boom

Recession

Short run fluctuations in output

Floating exchange rates are __ in the short run

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Stable

Volatile

Predictable

Depreciating

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 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.

Potential output can be increased by _________ or by_________

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Increasing the use of labour, increasing the use of land

Increasing the use of capital, increasing the use of labour

Increasing the use of land, increasing the use of capital

Increasing the use of all inputs technical advances

In a competitive industry each buyer and seller.

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Is a price taker

Produce different products

Believes that can influence price

Prevents the entry of competitors

The costs of inflation are

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Shoe leather costs

Menu costs

Income redistribution

All of the above

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

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

Women and non whiles on average receive lower comes than white men because.

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They tend to work in relatively unskilled jobs

Educational disadvantage

Firms are reluctant to invest in training

All of the above

If your income doubles and the prices of the goods you buy double, then your demand for these goods will likely

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Increase

Not change

Decrease

Shift

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