AD

What does AD stand for

• market demand

• effective demand

• total demand

• consumer demand

What is the formula for AD?

• C-G+X-M

• C+T+G+X+M

• C-G-I-X-M

• C+I+G+X-M

Which of the following is not a significant factor affecting consumer spending?

• interest rates

• consumer confidence

• house prices

• export demand

When consumer spending rises due to an increase in house prices we call this a........

• income effect

• demand effect

• substitution effect

• wealth effect

What do we mean by the accelerator effect?

• a change in income leads to an insignificant change in investment

• a change in income leads to a more than proportional change in investment

• a change in investment leads to a more than proportional change in income

• a change in income leads to a more than proportional change in GDP

What is the formula for net investment?

• gross + depreciation

• new - old

• gross - depreciation

• gross - inflation

What is the approx % of AD taken up by consumer spending in the UK?

• 40%

• 6%

• 63%

• 80%

What does the marginal efficiency of capital mean?

• rate of savings v expected return on investment project

• rate of savings v profit of firm

• profit of firm v base rate

• revenue v profit

What two tools does fiscal policy include

• base rate and tax

• base rate and govt expenditure

• tax and govt expenditure

• base rate and qe

Which of the following are two points in the economic cycle?

• boom and bust

• pop and snap

• crackle and pop

• ready and steady