Question # 1

The impossibility of negative gross investment provides a______ to fluctuations in.

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Celling, stock building

Celling, capital prices

floor , output

floor , the capital output ratio

The multiplier tells us how much __________ chagnes after a shift in.

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Consumption, income

Investment , output

Savings, investment

output, aggregate demand

When we refer to the hidden economy we mean unrecorded income owing to.

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Tax evasion

Poor statistics

The lags between statistical collection and publication .

Smuggling

Land will be allocated between competing uses so that.

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Housing gets priority

Industry gets priority

Faming gets priority

The equilibrium rental rate equilibrium total demand with supply

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

A competitive equilibrium is Pareto efficient because.

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Producers are price takers

Consumers and producer's face the same prices

Marginal costs and benefits are equal

All of the above

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

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Comparative advantage

Absolute advantage

Opportunity cost

Relative costs

Firms are assumed to ____ costs and to _______ profit.

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Incur , desire

Pay ; make

Change ;earn

Minimize ; maximize

If the income tax rate changes from 30% to 40% on incomes over L 30,000 and a person's income is l 31,000 then her marginal tax rate is.

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30%

10%

70%

40%

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

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Reduces, reduces

Reduces, increases

Increases, reduces

increases, increases

If the consumption of a good by one person does not reduce the quantity available by other and nobody cna be easily excluded from consumption, we are referring to a.

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Private good

Merit good

Public good

Abundant good

If some body is prepared to work at the going wage rate but cannot find work than they are victims of.

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Voluntary unemployment

Classical unemployment

Frictional unemployment.

All of the above

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

GDP per head may be an imperfect measure of economic welfare because it excludes.

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The value of leisure

Externalities

Untraded goods

All of the above

When capital mobility is perfect, interest rate differentials will tend to be offset by

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Price differences.

Balance of payments differences.

Current account differences.

Expected exchange rate changes

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

If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale this is an example of.

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a nonlinear relationship

A positive linear relationship

A scatter diagram

A negative linear relationship

The extra utility from consuming one more unit of a good is called.

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Marginal utility

Additional utility

surplus utility

Bonus utility

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

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inflationary expectations

Unemployment

The inflation rate

Wage rates

The equilibrium inflation rate is determine by the intersection of __________ and ___

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demand, supply

IS , LM

AD, AS

Labour demand, labour supply

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

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