Question # 1

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 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.

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

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Quarter

Third

Half

Three quarters

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

In the neoclassical theory of growth a higher saving rate leads to.

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A higher growth rate

A fluctuating growth rate

A lower growth rate

No change in the growth rate

The increase in total cost when one more units is produced is known as.

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Marginal cost

Opportunity cost

Limited cost

Average cost

Marginal revenue is the ________ when output is.

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Change in average revenue, inversed.

change in total revenue, increased by one unit

change in average revenue, increased by one unit

Change in total revenue, incresed.

On a graph a positive linear relation ship.

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Moves down to the right

Moves up to the left

Moves up to the right

Modes down to the left

The most important source of wage differentiate are.

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Reginal variation

Unionization

Relative danger

Skills

Real business cycle theories suggest that _____ to correct departures from the desired growth path.

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There is a role of fiscal policy

There is a role for monetary policy

There is a role for supply side policies

There is no case for stabilizing output over the business cycle.

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

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

The AD schedule indicates that______ inflation is associated with______ output.

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higher , lower

Higher , higher

Lower , lower

zero ,zero

We would normally expect the size of the labour force to be ____ than the number of workers willing to accept job offers at any real wage rate.

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Smaller

Larger

the same size

None of these

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 allocation of resources is not efficient it

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The marginal cost of production does not equal society marginal benefit

The distribution is inequitable

Economic growth is low

Unemployment is high

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

Starting from a balanced budget, for a given tax rate an increase in income will cause the government budget to.

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Move into surplus

Move into deficit

Remain unchanged

None of these

A current account deficit means that a country may.

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Reduce its stock of foreign assets

Increases its stock of foreign assets

Increases its savings

Increases its foreign currency reserves.

Comparing a monopoly and a competitive firm the monopolist will.

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Produce less at a lower price

Produce more at a lower price

Produce less at a higher price

Produce less at a lower price

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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