Question # 1

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

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

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

In the UK under a _________ of the labour force belong to a trade union.

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Quarter

Third

Half

Three quarters

If a long average cost rises, output rises from left to right this is an example of.

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Increasing returns to scale

Decreasing returns to scale.

Constant returns to scale

the minimum efficient scale

An optimal tariff is one which reduces imports to the level at which ___ equals

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imports , exports

The balance of trade, zero

The demand for currency, the supply of currency

Social marginal cost social marginal benefit

Comparing a monopoly and a competitive firm the monopolist will.

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Produce less at a lower price

Produce more at a lower price

Produce less at a higher price

Produce less at a lower price

The neoclassical theory of growth identities the steady state rate of growth as the _________ just sufficient to keep _______ constant while labour grows.

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Saving investment

Capital per person productivity

Labour growth , output

Investment capital per person

If one country, with floating exchange states, has higher inflation than its competitors, we would expect its exchange rate to.

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Appreciate

Depreciate

Revalue

be in short supply

By restricting labour supply a trade union can _________ and_______

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Increase the wage, increase employment

Maintain the wage, increase employment

Increase the wage lower employment

Maintain the wage, lower employment

The short run Philips curve can shift in response to changes in

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inflationary expectations

Unemployment

The inflation rate

Wage rates

International difference in opportunity costs lead to countries acquiring.

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Comparative advantage

High exchange rates

Trade exchange rates

Trade barriers

A good example of a public good is.

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Public transport

National defense

The national health service

Rail transport

The business cycle describes fluctuations in output around the.

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Trend path of output

Boom

Recession

Short run fluctuations in output

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.

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.

An allocation is Pareto efficient if no reallocation of resources would make some people_______ whiteout making others

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Worse off, worse off

better off, better off

better off, worse off

equal , unequal

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

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

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Primary products

Intermediate products

Manufactured products

Financial services.

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

Starting from a balanced budget, for a given tax rate an increase in income will cause the government budget to.

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Move into surplus

Move into deficit

Remain unchanged

None of these

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