PPSC Economics Chapter 11 Assess Your Basics With Answers

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PPSC Economics Chapter 11 Assess Your Basics

Sr. # Questions Answers Choice
1 The multiplier accelerator model assumes _______ depends on. Consumption, expected future profits. Investment, interest rates. Investment expected future profits. Stock building, interest rates.
2 The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the. Sun spect theory Multiplier accelerator model Solow theory New classical theory
3 All of the following are parts of the business cycle except. Boom slump Recovery Acceleration
4 The business cycle describes fluctuations in output around the. Trend path of output Boom Recession Short run fluctuations in output
5 The growth rate of economics tend to converge because._________ is easier when capital per worker is low and because of_____ capital widening, technical innovation Capital widening, catch up in technology Capital deepening, technical innovation Capital deepening, catch up technology.
6 Economic growth may depend upon __________ and_________ <div>Population size , x -efficiency</div> Population age distribution, education Population growth, education Population growth, technical progress
7 In the neoclassical theory of growth a higher saving rate leads to. A higher growth rate A fluctuating growth rate A lower growth rate No change in the growth rate
8 The neoclassical theory of growth identities the steady state rate of growth as the _________ just sufficient to keep _______ constant while labour grows. Saving investment Capital per person productivity Labour growth , output Investment capital per person
9 Potential output can be increased by _________ or by_________ Increasing the use of labour, increasing the use of land Increasing the use of capital, increasing the use of labour Increasing the use of land, increasing the use of capital Increasing the use of all inputs technical advances
10 GDP per head may be an imperfect measure of economic welfare because it excludes. The value of leisure Externalities Untraded goods All of the above
11 In the EMU a country's competitiveness can change because of. Interest rate adjustment Central bank intervention i the forex Domestic wage and price adjustment Devaluations
12 the Maastricht criteria for entry to the EMU are that applicants should have Low inflation Low interest rates Stable nominal exchange rate All of the above
13 All of the following are benefits of the single market except. 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.
14 The single European Act committed_ governments to a ___ in 1992 European union, single market Western European, single currency area European union, single currency area Western European, single market
15 In the ERM, each country fixed ___ against each other ERM participant collectively the group._____ against the rest of the world. A nominal exchange rate, floated A real exchange rate, pegged a purchasing power parity, pegged a real exchange rate, floated
16 Fiscal policy is weak under floating exchange rates as fiscal expansion. Crowds out imports Crowds out public consumption Crowds out exports Reduces the budget deficit
17 Floating exchange rates are __ in the short run Stable Volatile Predictable Depreciating
18 If one country, with floating exchange states, has higher inflation than its competitors, we would expect its exchange rate to. Appreciate Depreciate Revalue be in short supply
19 In the short run the level of floating exchange rates is determined mainly by. Interest rates Competitiveness Trade Speculation
20 Under floating exchange rates, expectations of higher interest rates are likely to cause an __________ of the exchange rate. Depreciation Appreciation fall Devaluation
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