BAIB1001 Week 3 Seminar 2 23/24

What type of market structure is characterised by a large number of sellers and buyers, homogenous products, and perfect information?

• a) Monopoly

• b) Oligopoly

• c) Perfect Competition

• 1. d) Monopolistic Competition

When the government sets a maximum price for a good or service, it is known as:

• a) Price floor

• b) Price ceiling

• c) Price control

• d) Price discrimination

Which of the following represents the phase of the business cycle characterised by a contraction in economic activity?

• a) Expansion

• b) Peak

• c) Trough

• d) Recession

Inflation refers to the:

• a) Decrease in the general price level of goods and services

• b) Increase in the general price level of goods and services

• c) Stability of prices over time

• d) Fluctuations in exchange rates

Structural unemployment occurs when:

• a) There is a temporary mismatch between job seekers and available job openings

• b) Workers are laid off due to a recession

• c) Workers quit their jobs voluntarily

• d) The overall economy is performing well

The official unemployment rate in a country is calculated by dividing the number of unemployed individuals by the:

• a) Total population

• b) Labor force

• c) Working-age population

• d) Employed population

A fixed exchange rate system is characterised by:

• a) Freely floating exchange rates

• b) The government actively managing the exchange rate to keep it at a specific level

• c) Exchange rates determined solely by market forces

• d) No exchange rate system in place

If the inflation rate is 4% and your savings account pays an annual interest rate of 2%, what is the real (inflation-adjusted) return on your savings?

• a) 2%

• b) 4%

• c) -2%

• d) 6%

Demand-pull inflation is caused by:

• a) An increase in production costs

• b) A decrease in the money supply

• c) An increase in aggregate demand

• d) A decrease in consumer spending

Which of the following is an example of an intermediate good?

• a) A car purchased by a family

• b) Steel used in the production of cars

• c) A new smartphone

• d) A loaf of bread