Question # 1

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

The opportunity cost of a good is.

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The time lost in finding it

The quantity of other goods sacrificed to get another unit of that good

The expenditure on the good

The loss of interest in using savings

Perfect price discrimination means that every customer.

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Buys the same amount

Pays the same price

Pays what she thinks the product is worth

Contributes the same revenue.

The opportunity cost of a student is.

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Course fees and rent

A loan from the bank

What the student could have earned in the best job available by not studying.

What the student will earn after graduation.

When investment is assumed to autonomous the slope of the AD schedule is determined by the.

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Marginal propensity to invest.

disposable income

Marginal propensity to consume

Average properisity to consume

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

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.

Short run equilibrium output means that aggregate demand _ actual output

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is less than

equals

is greater than

fluctuates around

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

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Quarter

Third

Half

Three quarters

A profit maximizing firm will hire labor until _______ equal the

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Marginal revenue, marginal cost

Long run marginal revenue, long run marginal cost

Labour output ratio, capital output ratio

Marginal cost of labour, marginal revenue product

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.

If both Marginal cost and marginal revenue increase, a firm.

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Should increase output

Should reduce output

Will require further information on how to respond

should not change output

Floating exchange rates are __ in the short run

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Stable

Volatile

Predictable

Depreciating

The value of an asset depends upon

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Its scrap value

Its depreciation

The present value of the failure stream of income it can earn.

the cost of loans

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 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

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.

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

The level of the equilibrium exchange rate offsets international difference in.

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Comparative advantage

Absolute advantage

Opportunity cost

Relative costs

Normative economics form ______ based on.

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Positive statements facts

Opinions, personal values

Positive statements values

Opinions facts

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