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.

Fiscal policy is weak under floating exchange rates as fiscal expansion.

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Crowds out imports

Crowds out public consumption

Crowds out exports

Reduces the budget deficit

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

If two firms doing the same thing in the same industry join together this is known as a.

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vertical merger

Horizontal merger

Conglomerate merger

Hostile takeover

The imposition of a tariff causes consumption to _______ and imports to.

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rise , rise

fall , rise

fall , fall

rise , fall

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%

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

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

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

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

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Reduce

Increase

do not change

None of these

Normative economics form ______ based on.

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Positive statements facts

Opinions, personal values

Positive statements values

Opinions facts

If goods are exported for less than society's marginal production cost and the marginal benefit to domestic consumers, it is likely that they benefit from.

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An import subsidy

A quota

Comparative advantage

An export subsidy

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

Real business cycle theory suggests that __________ not important in explaining short term fluctuations around actual output.

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aggregate supply is

aggregate demand is

Potential output is

Real variables are

Real business cycle are cycles in

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Potential output

Actual output

Real output

International trade

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

With fixed exchange rates and no private currency flow, when the central bank buys domestic currency the domestic money supply is.

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Increased

Unaffected

Reduced

All of the above

Aggregate demand without a foreign sector is the sum of.

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c+1

C+G

1+G

C+!+G

Economic growth may depend upon __________ and_________

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Population size , x -efficiency

Population age distribution, education

Population growth, education

Population growth, technical progress

Nominal GNP measures income

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At the present time

Corrected for tax changes

Corrected for changes in interest rates

At current prices

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

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

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