Question # 1

In an open economy leakages to imports ______ the value of the multiplier.

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Reduce

Increase

do not change

None of these

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

Polices to reduce unemployment by reducing union power tax cut reduction is unemployment benefit and investment. subsidies are examples of.

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Keynesian polices

Supply side policies

Monetarist policies

Classical policies

The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the.

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Sun spect theory

Multiplier accelerator model

Solow theory

New classical theory

Women and non whiles on average receive lower comes than white men because.

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They tend to work in relatively unskilled jobs

Educational disadvantage

Firms are reluctant to invest in training

All of the above

The quantity theory of money says that changes in ______ lead to equivalent changes in ______ but have no effect on.

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Prices, wages, output and employment.

Output, prices, employment

Nominal money, the price level output and employment.

Nominal money output prices

Extremality's arise because there is a divergence between ____ and _

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Private costs, private benefits

Private costs, social costs of benefits

Social cost, social benefit

Insiders, outsiders

For given government spending and taxation the government budget deficit will grow in __________ and decline in _________

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booms, booms

recession, recession

booms, recessions

recessions, booms

Taxes create a wedge between the sales price and purchase price that prevents the price system equaling _________ and

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Marginal costs, marginal benefits

Demand, supply

Marginal cost, marginal revenue

Marginal cost, average cost

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

A reduction in interest rates, causes an increases in the monetary base that result in an_____ in the availability of consumer credit and a _ in the cost of consumer credit.

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Reduction, increases

reduction,reduction

increase, reduction

increases, increases

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

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Quarter

Third

Half

Three quarters

The real value can be derived from a nominal value by

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Adjusting changes over time

Adjusting for data collection errors

Adjusting for population changes

Adjusting for changes in prices

All of the following are types of imperfect competition except

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Monopolistic competition

Oligopoly

Monopoly

Unfair competition

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

The effect of a tax to offset a negative eternality will be to ________ price and ____ quantity.

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Reduce, reduce

increase, increase

Increase , reduce

reduce, increase

Real business cycle are cycles in

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Potential output

Actual output

Real output

International trade

The prisoners Dilemma Game demonstrates that.

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Players are better off to act independently

Monopoly is better than competition

People will always cheat

Players are better off if they con operate

Short run average total costs are equal to the sum of _______ and______

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Short run opportunity costs, profit

Short run average variable costs, profit

short run average variable costs, profit.

Short run average variable costs short run average fixed costs

Leakages from the circular flow are____ and _____

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Investment savings, government expenditure

Saving , taxes net of subsidies, imports

Consumption, investment , government expenditure.

Consumption, taxes, impports

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.

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