Question # 1

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.

A dominant strategy is.

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A winning strategy

A losing strategy

A players best strategy when moving fist

a player's best strategy whatever the strategies adopted by rivals

A person who is made redundant because of the contraction of an industry is a victim of.

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Frictional unemployment

Demand deficient unemployment

Classical unemployment

Structural unemployment

Real GNP is a crude measure of national welfare because it excludes.

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Consumption

Investment

Export's

work in the home

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

In an economy, measuring total value (1) added, total value(2) spending on final goods and 3 total factor earning gives the result that.

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3>2>1

3 +2>1

3<2<1

Any measure can be larger or smaller than any other

the Maastricht criteria for entry to the EMU are that applicants should have

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Low inflation

Low interest rates

Stable nominal exchange rate

All of the above

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

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

Within circular flow of income, an increase in domestic income iwll lend to increase.

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Exports

Taxes

Inventories

Imports

M4 is a _________ measures of money and includes deposits at both _____________ and

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Narrow, banks, building societies

Wide, banks, insurance companies

narrow, banks, insurance companies

Wide, banks, building societies.

Possible causes of involuntary unemployment are

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Minimum wage agreements

Trade unions

Scale economies

All of the abvoe

Normative economics form ______ based on.

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Positive statements facts

Opinions, personal values

Positive statements values

Opinions facts

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.

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.

Under floating exchange rates, expectations of higher interest rates are likely to cause an __________ of the exchange rate.

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Depreciation

Appreciation

fall

Devaluation

Short run equilibrium output means that aggregate demand _ actual output

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is less than

equals

is greater than

fluctuates around

A tariff causes domestic firms to __________ and consumers to

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Overproduced, under consume

overproduce , overconsume

Underproduce, under consume

underproduce, overconsume

When real income increases, other things equal we fan expect the demand for real money holdings to.

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Fall

Not change

Increase

Decrease

In the short run, the supply of capital is _______ and in the long run iwll depend on.

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Variable technology

Fixed, expectations

Fixed, rental rate of capital

Variable, interest rates.

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

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rise , rise

fall , rise

fall , fall

rise , fall

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