Question # 1

Under floating exchange rates, expectations of higher interest rates are likely to cause an __________ of the exchange rate.

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Depreciation

Appreciation

fall

Devaluation

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

In the UK in recent years, union membership has ______ and days of work lost because of strikes has.

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Grown, declined

declined, declined

declined, grown

grown , grown

In the EMU a country's competitiveness can change because of.

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Interest rate adjustment

Central bank intervention i the forex

Domestic wage and price adjustment

Devaluations

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

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 business cycle describes fluctuations in output around the.

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Trend path of output

Boom

Recession

Short run fluctuations in output

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

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

In linear consumption function with a positive slope less that on means that if income increase, consumption will.

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Fall

Not change

Fluctuate

Increase

If a person thinks they are better off after a 10% wage increase, and all prices have risen 10%, then they are experiencing.

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Inflation

A supply shocks

Crowding out

Inflation illusion

Top footballers land to earn more than lecturers because.

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Footballers give more entertainment

Lecturers are lazy

The labour markets are imperfect

Top footballers are relatively scarce in relation to lecturers

If demand is _______ then price cuts will ________ spending.

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Inelastic, increase

Elastic, increase

Elastic, decreases

None of the above

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

All of the following represent obstacles to LDC development except.

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Resource scarcity

Low level of investment

Low population

Poor infrastructure

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.

The growth rate of economics tend to converge because._________ is easier when capital per worker is low and because of_____

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capital widening, technical innovation

Capital widening, catch up in technology

Capital deepening, technical innovation

Capital deepening, catch up technology.

In a competitive industry each buyer and seller.

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Is a price taker

Produce different products

Believes that can influence price

Prevents the entry of competitors

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

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.

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

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