External economic influences on business behaviour

Which of the following is not an economic objective of most governments?

• Keep the rate of inflation low

• Achieve a steady rate of economic growth

• Maintain a low level of unemployment

• Reduce the level of employment

One of the common features of an economic 'boom' is:

• a reduction in the rate of inflation

• a reduction in the rate of employment in the economy

• an increase in demand for income elastic products

• a reduction in land and property prices

During a long period of economic growth, which of the following statements is likely to be correct?

• Manufactures of essential products may try to develop a range of income elastic goods

• Retailers will often reduce the price of products to try to reverse falling consumer demand

• Manufacturers of income elastic products will cut back on production

• The number of entrepreneurs setting up new businesses is likely to fail

Which of the following is the most likely cause of cost - push inflation?

• An increase in consumer demand

• An increase in demand for a country's exports

• A rise in demand for essential commodities such as oil

• An increase in government subsidies to industry

A reduction in the rate of interest set by a country's Central Bank is likely to lead to:

• house construction businesses cutting back on output

• a fall in the value of a country's currency exchange rate

• an increase in demand for inferior goods

• a fall in expansion investment decisions by industry

An appreciation of a country's currency exchange rate is most likely to lead to businesses in that country:

• importing more raw materials and increasing prices in export markets

• reducing imports of raw materials and reducing prices in export markets

• reducing outsourcing from firms in other countries

• increasing prices in the domestic market to be more competitive against imports

Unemployment caused by the decline in important industries is called?

• Cyclical

• Structural

• Frictional

A period of very fast economic growth with rising incomes and profits is called?

• Boom

• Recession

• Slump

• Recovery

Unemployment resulting from workers losing or leaving jobs and taking a substantial period of time is called?

• Cyclical

• Structural

• Frictional

Concerned with decisions about government expenditure

• Monetary Policy

• Fiscal Policy

• Exchange Rate Policy