A2 Business Economics

What is inflation?

• rise in all prices
• rise in most prices
• rise in some prices
• rise in general prices

Most countries try to maintain an inflation rate of ______ per year.

• One percent or less

• Two to three percent

• Four to five percent

• Six to seven percent

The _______ considers the weighted averages of a group of consumer goods and services.

• Consumer price index

• Aggregate supply

• Producer price index

• Aggregate demand

What is an exchange rate?

• The rate at which goods are exchanged between two countries

• The price of one nation's currency in terms of another's

• How many US dollars you can exchange for RMB at Travelex

• The price of goods in terms of a foreign currency

Tags

CCSS.6.RP.A.3B

According to the table, what is the Euro equivalent of 1 USD?

• 1.32 Euros

• 0.53 Euros

• .76 Euros

• 1.59 Euros

Tags

CCSS.6.RP.A.3B

According to the table, what is the USD equivalent of 1 Australian?

• 0.97 USD

• 1.32 USD

• 1.28 USD

• 1.03 USD

If the AUD were to appreciate in the relation to the USD, what effect would this have?

• Australian imports become cheaper.

• Australian exports become more expensive to American buyers.

• Australian imports become more expensive.

• Australian exports become less expensive to American buyers.

What is the aim of contractionary monetary policy?

• Stimulate the economy

• Encourage people to buy more, increasing inflation

• Lower demand and reduce inflation

• Raise employment levels

Which of these is a fiscal policy tool?

• Interest rates

• Exchange rate

• Money supply

• Taxation

The graphs show how consumer prices and real GDP changed in a country between 1995 and 2005. Which conclusion may be drawn from the graphs?

• Living standards remained roughly constant between 1995 and 2005.

• The level of GDP was lower in 2005 than in 2000.

• The country experienced continuous economic growth between 1995 and 2005.

• The price level fell between 2000 and 2003.