MCQ 4
All other things being equal, lower inflation in an economy is most likely to be achieved if there is an increase in
A) Productivity
B) Exports
C) Consumption
D) Welfare Benefits.
Structural unemployment is most likely to be caused by
A) A recession in the economy.
B) Changes in the demand for labour at different times of the year.
C) An increase in the number of people changing jobs.
D) The skills of the unemployed not matching those skills required for the available jobs.
All other things being equal, which one of the following sets of changes in an economy, A,B, C or D, would be most likely to bring about an improvement in its balance of payments deficit on current account?
A) A decrease in taxes on income, a fall in the exchange rate and a decrease in labour productivity.
B) An increase in taxes on income, a fall in the exchange rate and an increase in labour productivity.
C) An increase in government spending, a rise in the exchange rate and a decreae in labour productivity.
D) A decrease in government spending, a rise in the exchange rate and an increase in labour productivity.
A) An increase in interest rates and a reduction in exports.
B) An increase in household saving and a reduction in investment.
C) An increase in imports and a reduction in exports.
D) An increase in government spending and a reduction in the exchange rate.
A) Real GDP decreased between 2007 and 2008.
B) Real national output increased each year from 2002.
C) Real GDP rose in 2002.
D) Real GDP was highest in 2004.
A sustained fall in the exchange rate is most likely to decrease
A) Inflation
B) International Competitiveness.
C) Economic Growth.
D) Unemployment.
All other things being equal, if inflation in the UK economy falls from 3% to 1%, it can be concluded that
A) Money incomes in the UK have decreased.
B) On average, the prices of goods and services in the UK have fallen.
C) UK goods have become more compeititve in international markets.
D) The cost of living for the average person in the UK has continued to rise.
A conflict between macroeconomic policy objectives sometimes exists because
A) Demand-pull inflation requires action that increases aggregate demand.
B) Costs can be reduced only if prices fall.
C) An increase in aggregate demand might reduce unemployment but result in a deterioration in the balance of payments on current account.
D) Supply-Side policies cannot be used alongside demand-management policies.
A) Point T.
B) Point U.
C) Point V.
D) Point W.
A) Unemployment Rate: 5.33%, Employment Rate: 93.75%.
B) Unemployment Rate: 6.25%, Employment Rate: 80%.
C) Unemployment Rate: 5.33%, Employment Rate: 80%.
D) Unemployment Rate: 6.25%, Employment Rate: 93.75%.
A) 231
B) 43
C) 143
D) 130
A) X has to be less than 20.
B) X has to be greater than 0.8.
C) X has to be greater than 20.
D) X has to be less than 0.8.
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