Question # 1

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.

If the MPC is 0.5 the multiplier is

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2

1/2

0.2

20

Firms are assumed to ____ costs and to _______ profit.

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Incur , desire

Pay ; make

Change ;earn

Minimize ; maximize

If I keep some money available in case I see a bargain this is an example of.

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Asset demand for money

Transactions demand for money

Token demand for money

Precautionary demand for money

At the intersection of AD and AS equilibrium is achieved in.

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The goods market

The money market

The labour market

All of the above

If a price increase of good A increases the quantity demanded of good B, then good B is a.

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substitute good

Complementary good

Bargain

Interior good

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

a demand curve can shift because of changing.

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Incomes

Prices of related goods

Testes

All of the above

A natural monopoly has a declining ________ over a large range of output.

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Long run marginal cost

Short run marginal cost

Long run average cost

Long run marginal cost

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

The Philips curve shows the trade off between ________ and _____

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The inflation rate, interest rates

The inflation rate, the unemployment rate

interest rates, output

Output, employment

A straight line diagram can be drawn knowing the _______ and _____

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Vertical axis and horizontal axis

Intercept and slope

Scale and slope

Intercept and scale.

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

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

If a firm not operating at the output necessary to achieve al scale economies it has not achieved its.

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Efficient scale

Average efficient scale

Maximum efficient scale

Minimum efficient scale

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

Short run equilibrium output means that aggregate demand _ actual output

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is less than

equals

is greater than

fluctuates around

The most important source of wage differentiate are.

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Reginal variation

Unionization

Relative danger

Skills

The long run Philips curve is _________ at the ______

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Horizontal natural rate of inflation

Horizontal , natural rate of unemployment

Vertical , natural rte of inflation

Vertical , equilibrium rate of unemployment.

If my neighbor burns garden waste causing my house to fil with smoke this is an example of.

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A production extremality

A second best solution

Transaction costs

A consumption externality

During periods of rising inflation and rising interest rates we expect the demand for real cash to.

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rise

fall

not change

fluctuate

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