Question # 1

Real business cycle are cycles in

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Potential output

Actual output

Real output

International trade

Expansionary fiscal policy in the classical model will cause aggregate demand to ______ potential output.

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Exceed

Fall below

Fluclaute around

Remain equal to.

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

Adding up the quantities demanded of a good by different people facing the same price gives us the.

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Supply curve

Market demand curve

Demand curve

Market supply curve

The costs of inflation are

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Shoe leather costs

Menu costs

Income redistribution

All of the above

An upward shift in marginal cost ___________ output and an upward shift in _____ marginal revenue __ output.

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Reduce , reduce

Reduce , increase

Increased, increased

Increases, reduces

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

In the UK in recent years, union membership has ______ and days of work lost because of strikes has.

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Grown, declined

declined, declined

declined, grown

grown , grown

For perfect competition ot work there must be

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Many buyers and sellers

A standard product

Free entry and exit

All of the above

Economics is the study of

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Production technology

Consumption decisions

How society decides what how and for whom to produce

The best way to run society

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

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

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Primary products

Intermediate products

Manufactured products

Financial services.

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

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

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

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Reduces, reduces

Reduces, increases

Increases, reduces

increases, increases

A competitive firm produces a level of output at which.

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Price is greater than marginal cost

Price equals marginal cost

Price is less than marginal cost

None of the above

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.

In the economy when a steel producer sells steel to car producer it is regarded as.

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A final good

An intermediate good

an injection

a leakage

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

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Consumption

Investment

Export's

work in the home

One of the transmission mechanism of monetary policy is through consumer house hold wealth.___________ and consumption.

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rise, increases, increases

rise, falls, increases

rise, increases, falls

rise, falls, falls

Firms are assumed to ____ costs and to _______ profit.

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Incur , desire

Pay ; make

Change ;earn

Minimize ; maximize

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