Economics Quiz

Which organisations can directly fund the growth of firms?

Which advantage do coins have that makes them more suitable than paper banknotes to act as money?

• They are more divisible.

• They are more durable.

• They are more portable.

• They are more recognisable.

Which statement about different income groups is correct?

• High-income groups do not need to borrow money.

• High-income groups save less money than low-income groups.

• Low-income groups find it easier to borrow than high-income groups.

• Low-income groups save a smaller percentage of their income than high-income groups

A musician has a choice of playing for an orchestra in either Germany or England. Which combination of incomes and cost of living is most likely to cause her to choose the German orchestra?

A trade union states that its members have experienced a loss in real income over the past five years. What must have happened for this to be true?

• Income tax rates have increased.

• Prices have risen.

• Savings have fallen.

• Wages adjusted for inflation have fallen.

A firm provides a personal service to its customers. It prefers to remain labour-intensive rather than changing to more capital-intensive production. Which aspect of remaining labour-intensive would support this choice?

• Customer satisfaction is higher.

• Production costs are higher.

• Production is less flexible.

• Quality of customer service is worse.

Why might one profitable oil-drilling firm wish to take over another profitable oil-drilling firm?

• to bring its suppliers into the same firm

• to get closer to its customers to increase sales

• to reduce its costs per unit of output

• to reduce the amount of corporation tax it paid

The central bank of a country decreases interest rates to help the economy out of a recession. How is this decrease in interest rates most likely to affect the levels of saving in and borrowing from the country’s commercial banks?

Which statement is correct when comparing small firms with large firms?

• Small firms are more able to adapt to changes in market conditions.

• Small firms are more able to reduce competition through barriers to entry.

• Small firms benefit from lower cost per unit from economies of scale.

• Small firms have higher total fixed costs and lower average fixed costs.

Which pair is included in a government’s budget?

• consumption and factor income

• exports and imports

• investments and savings

• public expenditure and tax revenue