Set 22

If, in a fully employed, closed economy, the supply of money and the velocity
of circulation of money both increase, then in the short-run.
1. Unemployment of factors will result
2. Real national output will expand
3. The volume of transactions will increase
4. The average level of prices will rise
An increase in the rate of inflation which is not accompanied by any change in
the volume of consumer goods sold will automatically increase the:
1. Revenue from Value Added Tax
2. Level of company profits
3. Level of unemployment
4. Average level of wages
The increase in the Public Sector Borrowing Requirement (PSBR) to almost
£50 billion this year will automatically lead to:
1. A higher rate of inflation
2. A fall in the rate of unemployment
3. An increase in the National Debt
4. A deterioration in the Balance of Payments
The investment demand curve shows the relationship between the levels of:
1. Investment and Consumption
2. Consumption and Interest Rate
3. Investment and Interest Rate
4. None
According to Classical models, the level of employment is determined
primarily by:
1. The level of aggregate demand for goods and services.
2. Prices and wages.
3. Government taxation.
4. Government spending.
Which of the following is not an important variable in growth accounting
calculations?
1. Productivity growth
2. Money supply growth
3. Labour growth
4. Capital growth
The per-worker production function relates:
1. Output per worker to capital per worker.
2. Output per worker to production per worker
3. Output per worker to factors of production per worker.
4. Production per worker to the size of the work force.
In a steady-state economy:
1. Net investment equals depreciation rate.
2. Per capita capital stock grows at the rate of labour growth
3. Per capita capital stock remains constant.
4. Net investment equals the consumption.
The war in Iraq sent oil prices spiraling upwards, resulting in an increase in
the overall price level. This is an example of which type of inflation?
1. Cost-pull
2. Cost-push
3. Demand-pull
4. Demand-push
The IMF is an agency charged with providing:
1. Technical assistance to stock market and financial market problems.
2. Loans for post-World War II reconstruction.
3. Short -term credit for international balance of payments deficits.
4. Bonds denominated in U.S. dollars as a loan to LDCs.
In a portfolio investment:
1. Investors are directly involved in managing the operations.
2. As in direct investment, investors export goods and services abroad.
3. Investors transfer the technology to local investors.
4. Investors have no control over operations.
Inflation:
1. Reduces both the purchasing power of the dollar and one's real income
2. reduces the purchasing power of the dollar and increases one's real income
3. Reduces the purchasing power of the dollar but may have no impact on
  one's real income
4. Increases the purchasing power of the dollar and reduces one's real income
One of the tenets of the classical view of the labour market is that the wage
adjustments that are necessary to clear the labour market occur:
1. Slowly
2. Quickly.
3. Very infrequently
4. Instantly.
Those that hold the classical view of the labour market are likely to believe
that:
1. Monetary, but not fiscal policy will have an effect on output and employment.
2. Both monetary and fiscal policy will have an effect on output and employment
3. Fiscal, but not monetary policy will have an effect on output and employment.
4. Neither monetary nor fiscal policy will have an effect on output and
  employment.
Potent ial GDP is the level of aggregate output:
1. That can be produced if structural unemployment is zero.
2. That can be produced at a zero unemployment rate.
3. That can be sustained in the long run, if the inflation rate is zero.
4. That can be sustained in the long run without inflation.
Which school of economic thought suggested that one possible cause of
inflation was a 'push' from the cost side?
1. New classical economists.
2. Monetarists.
3. Marxists.
4. Keynesians.
An unspoken agreement between workers and firms that the firm will not cut
wages is known as:
1. An explicit contract.
2. An implicit or social contract.
3. Employment-at-will.
4. A relative-wage contract.
To offset the downswing in the business cycle, the government announces a
major increase in public expenditure
1. Technological Unemployment
2. Demand Deficient Unemployment
3. Real Wage Unemployment
4. Regional Unemployment
The government puts pressure on trade unions to make pay claims which are
below the increase in productivity over the past year.
1. Frictional Unemployment
2. Technological Unemployment
3. Structural Unemployment
4. Real Wage Unemployment
In which case is total expenditure in an economy not equal to total income?
1. If total saving is larger than total investment
2. If net exports are not zero
3. If inventory investment is negative
4. None of the above--they are always equal

Set 22

Quiz