Question # 1

A firm that breaks even after all economic costs are paid is earning.

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Economic profit

Accounting profit

Normal profit

Supernormal profit

When investment is assumed to autonomous the slope of the AD schedule is determined by the.

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Marginal propensity to invest.

disposable income

Marginal propensity to consume

Average properisity to consume

The total multiplier for the economy will reflect.

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MPC and MPT

MPT and MPZ

MPC and MPZ

MPC, MPT and MPZ

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.

Expansionary fiscal policy in the classical model will cause aggregate demand to ______ potential output.

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Exceed

Fall below

Fluclaute around

Remain equal to.

In the UK mergers can be referred to the competition commission of they create a firm with _______ of the market.

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15%

20%

25%

30%

Perfect international capital mobility suggests that international funds will be responsive to _______ differentials.

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Current account

Interest rate

Tax

Price

Economics is the study of

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Production technology

Consumption decisions

How society decides what how and for whom to produce

The best way to run society

The main cause of different relative costs between countries are.

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Relative factors competition

Relative factor mobility

Relative factor substitution

Relative factor endowments

A production technique is technically efficient if.

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Output is maximized

Input are minimized

there is no way to make a given output using less of one input and no more of the other inputs.

costs are minimized

LDC's often have a comparative advantage in the production of.

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Primary products

Intermediate products

Manufactured products

Financial services.

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

All of the following are types of imperfect competition except

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Monopolistic competition

Oligopoly

Monopoly

Unfair competition

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

When capital mobility is perfect, interest rate differentials will tend to be offset by

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Price differences.

Balance of payments differences.

Current account differences.

Expected exchange rate changes

The single European Act committed_ governments to a ___ in 1992

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European union, single market

Western European, single currency area

European union, single currency area

Western European, single market

A supply curve is directly affected by

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Technology

Input costs

Government regulation

All of the above

All of the following are benefits of the single market except.

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It allows countries to exploit their comparative advantage, more fully

Firms could more readily exploit economies of scale

It intensified competition

It is easier book holidays in member countries.

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

Real business cycle theorists argue that ___________ can explain short and long term fluctuations in output.

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Imperfect labour markets

Rational expectations

Intertemporal decisions of households firms and government.

Sun spot cycles

Adding up the quantities demanded of a good by different people facing the same price gives us the.

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Supply curve

Market demand curve

Demand curve

Market supply curve

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