Economics Revision Circular

What circular flow condidtion is essential for economic growth?

• Consumption is higher than savings

• Government spending is higher than taxes

• Exports are higher than imports

• Injections are higer than leakages

Which of these is the correct formula for the multiplier?

• 1/MPC

• 1/(1-MPS)

• 1/(1-MPC)

• 1-MPC

Who is this?

• John Maynard Keynes

• Milton Keynes

• Mr Multiplier

• Adam Smith

Which of these best describes Keynes' attitude to markets?

• The markets can solve problems themselves, leave them alone

• Governments should manage markets, especially in recessions

• Markets are evil and must be controlled

• Governments should manage markets only in booms.

Free market economists believe increased G will push interest rates & taxes up. This is called ...

• Crowding up

• Crowding down

• Croweding in

• Crowding out

Which phase of the economic cycle follows a recession?

• Boom

• Recovery

• Downturn

• Slump

Trend growth is ...

• the average rate of real GDP from recent years

• the Government's target for the next few year

• the current rate of economic growth

• volatile

What do we call NATURAL factors that reduce growth in a boom and increase it in a recession?

• Dynamic stabalisers

• Manual stabalisers

• Economic stabalisers

• Automatic stabalisers

What does 'trade-offs' mean, when we are discussing Government policies?

• Improving one economic indicator may make another one worse

• Things that affect imports and exports

• Alternative policies that we have rejected

• Positive and negative things about a policy

Which of these would lead to GROWTH in the UK economy?

• Increased interest rates

• Increased GDP in countries that buy UK exports

• Increased savings

• Increased taxation and government spending