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 A fixed exchange rate, plus perfect capital mobility _______ the scope for monetary policy. Enhances Undermines Encourages Facilitates
2 In the absence of international capital controls, central banks set ______ to provide the correct incentive for speculators Money supply targets Income policy Interest rates Inflation targets
3 With fixed exchange rates and no private currency flow, when the central bank buys domestic currency the domestic money supply is. Increased Unaffected Reduced All of the above
4 When capital mobility is perfect, interest rate differentials will tend to be offset by Price differences. Balance of payments differences. Current account differences. Expected exchange rate changes
5 Perfect international capital mobility suggests that international funds will be responsive to _______ differentials. Current account Interest rate Tax Price
6 Within circular flow of income, an increase in domestic income iwll lend to increase. Exports Taxes Inventories Imports
7 A rise in the real exchange rate will __ the competitiveness of the domestic economy. Increase reduce do nothing do all of these
8 Starting from a position of internal and external balance a reduction in aggregate demand will cause a current account. Deficit Surplus Revaluation Devaluation
9 A current account deficit means that a country may. Reduce its stock of foreign assets Increases its stock of foreign assets Increases its savings Increases its foreign currency reserves.
10 In a fixed exchange rate regime, the central bank will intervene by __ pounds to ______ the exchange rate. Selling, increase buying , increase selling, reduce both b and c
11 When the S/L exchange rate rises the pounds______ and whent he S/L rate falls the pounds. depreciates, appreciates revalues, devalues appreciates, deprecates becomes more expensive, becomes cheaper
12 If British Residents want more French francs to purchases more fresh wine, other things equal than the equilibrium value of the pound against the French farce will. Rise fall not changes fluctuate
13 Possible causes of involuntary unemployment are Minimum wage agreements Trade unions Scale economies All of the abvoe
14 The abolition of income tax would probably ________ the number of workers in employment and____________ the equilibrium. rate of unemployment. increase ; decrease increase ; increase reduce ; increase reduce ; reduce
15 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. 30% 10% 70% 40%
16 Polices to reduce unemployment by reducing union power tax cut reduction is unemployment benefit and investment. subsidies are examples of. Keynesian polices Supply side policies Monetarist policies Classical policies
17 If some body is prepared to work at the going wage rate but cannot find work than they are victims of. Voluntary unemployment Classical unemployment Frictional unemployment. All of the above
18 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. Smaller Larger the same size None of these
19 An advocate of the classical model of the economy would claim that unemployment a created when the ___________ is above its equilibrium level in the. Price level, agregate economy Tax rate, government ebudget Wage rate, labour market Interest rate, market for loanable funds
20 A person who is made redundant because of the contraction of an industry is a victim of. Frictional unemployment Demand deficient unemployment Classical unemployment Structural unemployment
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