The value of the British pound (sterling) would likely depreciate if there is:

An increase in the supply of sterling AND a reduction in the demand for sterling

An increase in the supply of sterling AND an increase in the demand for sterling

A reduction in the supply of sterling OR a reduction in the demand for sterling

A reduction in the supply of sterling OR an increase in the demand for sterling

A country's exports would likely increase due to:

A depreciation of the exchange rate

An appreciation of the exchange rate

If a country has a comparative advantage in producing a good that is in high demand globally, what is the most likely outcome for its economy?

The country will experience an increase in its GDP.

The country will experience a decrease in its GDP.

The country will experience a decrease in its population.

The country will experience an increase in its unemployment rate.

What is the primary reason why countries impose tariffs on imports?

To protect domestic industries from foreign competition.

To encourage domestic consumption of foreign goods.

To promote economic growth through increased trade.

If a country experiences a significant increase in the value of its currency, what is the most likely impact on its exports?

Exports will decrease because they become more expensive for foreign buyers.

Exports will increase because they become cheaper for foreign buyers.

There will be no change in exports.

Exports will decrease because domestic industries cannot compete with foreign ones.

If a country has a trade surplus, what is the most likely impact on its current account balance?

The current account balance will increase.

The current account balance will decrease.

There will be no change in the current account balance.

The current account balance will fluctuate wildly.

What is the main argument for free trade between countries?

It allows countries to specialize in producing goods and services where they have a comparative advantage.

It leads to a more balanced distribution of wealth.

It ensures that all countries have equal access to resources.

It prevents the exploitation of weaker economies by stronger ones.

If a country decides to devalue its currency, what is the most likely impact on its imports?

Imports will increase because they become cheaper.

Imports will decrease because they become more expensive.

There will be no change in imports.

Imports will decrease because domestic industries become more competitive.

In the context of international trade, what is the significance of the concept of 'comparative advantage'?

It determines the types of goods and services a country should produce.

It measures the economic strength of a country relative to others.

It indicates the level of protectionism a country should implement.

It defines the maximum amount of trade a country can engage in.

A depreciation of sterling would be caused by ________ and/or ________.

a reduction in the supply of sterling; a reduction in the demand for sterling

Which of the following would cause exports to rise?

A depreciation of the exchange rate

An appreciation of the exchange rate

If a country's balance of payments shows a surplus in the current account, this typically indicates that:

the country is exporting more than it is importing.

the country is importing more than it is exporting.

the country is experiencing a recession.

the country is running a budget deficit.

In the context of international trade, what is the difference between a tariff and a quota?

Tariffs are taxes on imports, while quotas limit the quantity of goods that can be imported.

Tariffs are used to protect domestic industries, while quotas are used to control inflation.

Tariffs are used to encourage exports, while quotas are used to discourage imports.

Tariffs are used to increase government revenue, while quotas are used to protect domestic jobs.

If a country has a negative trade balance, what is the most likely impact on its currency?

The country's currency will depreciate.

The country's currency will appreciate.

The country's currency will remain stable.

The country's currency will fluctuate wildly.

What is the primary purpose of the World Trade Organization (WTO)?

To promote economic growth through international trade.

To regulate global trade and ensure fair competition among nations.

To protect the environment and promote sustainable development.

To provide financial aid to developing countries.

If a country has a high level of foreign direct investment (FDI), what is the most likely impact on its economy?

The country will see an increase in its GDP and job creation.

The country will experience a significant increase in unemployment.

The country will face a shortage of skilled workers.

The country will experience a decline in its standard of living.

In the context of international finance, what does the term 'capital flight' refer to?

The movement of capital from a country to another country.

The sudden withdrawal of foreign investors from a country's stock market.

The rapid increase in a country's foreign exchange reserves.

The reduction in a country's national debt.

If a country's central bank implements a policy of quantitative easing, what is the most likely impact on its economy?

The country's currency will depreciate.

The country's inflation rate will decrease.

The country's interest rates will increase.

The country's GDP will increase.

If a country has negative outward FDI, this means that

sales of existing investments abroad exceed new investments abroad.

outward investment as a percentage of inward investment is falling.

sales of foreign assets in the country exceed sales of the country's assets abroad.

inward FDI exceeds outward FDI.

A horizontally integrated multinational is one that

produces the same product in more than one country.

produces various stages of production in different countries.

one which exports more than 50% of output.

produces different products in different countries.

Multinational corporations (MNCs) engaging in technological transfer may lead to gains elsewhere in the economy as

other companies in the host country may try to copy the methods.

the MNC takes market share from local companies.

workers trained by the MNC move to other parts of the economy.

If a country has negative outward FDI, this means that

inward FDI exceeds outward FDI.

sales of foreign assets in the country exceed sales of the country's assets abroad.

outward investment as a percentage of inward investment is falling.

sales of existing investments abroad exceed new investments abroad.

If the total expenditure of the UK public sector is £650bn and revenues to the UK public sector are £325bn each year, then

the UK will have a PSNB of £325bn.

the UK will have a PSNB of -£325bn.

the UK government will have a budget deficit of £325bn.

the UK general government debt will rise by £325bn.

If Argentina has an absolute advantage in the production of wheat and Chile has an absolute advantage in the production of copper, then

it is reasonable to expect that specialisation and trade will benefit both countries.

neither country has anything to gain from specialisation and trade.

it is reasonable to expect that trade will benefit both countries, but specialisation will not.

it is reasonable to expect that specialisation will benefit both countries, but trade will not.

The main advantage of trade between two countries is that

both countries can consume beyond their previous resource and productivity constraints.

trade makes both countries more self-sufficient.

employment in both countries will increase.

both countries can produce beyond their previous resource and productivity constraints.

Which one of the following would appear as a credit item in the UK balance of payments?

The expenditure by Japanese tourists on holidays in the UK.

Money sent by UK residents to relatives living in Australia.

Investment by UK companies in new factories in the USA.

The purchase of German cars by consumers in the UK.

Expenditure by the British government in maintaining its embassy in Russia.

When a country hosts the Olympics this can be expected to

lead to a depreciation of the host country's currency.

reduce the supply of the country's currency on the foreign exchange markets.

increase the country's exports.

Fiscal stance refers to

whether a government is pursuing an expansionary or contractionary fiscal policy.

a government that is running a budget deficit.

a government that takes a tough stance when it comes to running the country's finances.

a government that prefers the use of fiscal to monetary policy for demand management.

If the economy were booming, we would expect

government expenditure to be low and tax revenues to be high so that the public sector might be running a surplus.

government expenditure to be low and tax revenues to be low so that the government could pay off the central government debt.

government expenditure to be high and tax revenues to be low causing a large budget deficit.

A central bank wishing to operate a tighter monetary policy might

raise interest rates and use open-market operations to reduce the money supply.

reduce interest rates but use open-market operations to reduce the money supply.

lower interest rates to encourage spending and discourage saving.

promote investment in other countries by domestic firms.

Kathy eats five slices of pizza on a Saturday night but admits each slice of pizza doesn't taste as good as the previous one. This suggests that for Kathy:

the marginal utility of a slice of pizza is positive but decreasing.

the marginal utility of a slice of pizza is negative.

the total utility of slices of pizza is increasing by larger and larger increments.

the total utility of slices of pizza is declining.

Which of the following is an example of a tight/contractionary monetary policy?

An increase in the liquidity ratio

The central bank buying government securities in the open market

If the UK economy is experiencing a recession, the Federal Reserve is most likely to:

decrease interest rates to stimulate economic activity.

maintain current interest rates to support the economy.

increase interest rates to curb inflation.

implement quantitative easing to inject liquidity into the economy.

Which of the following actions by a central bank would be considered expansionary?

Lowering the discount rate to encourage borrowing

Increasing reserve requirements for banks

Selling government bonds to reduce the money supply

Implementing a fiscal austerity program

If a country's central bank wants to stabilize the exchange rate, it might:

intervene in the foreign exchange market to buy its own currency.

increase interest rates to attract foreign investors.

decrease interest rates to encourage domestic investment.

sell its own currency to increase its value.

In the context of monetary policy, what is the purpose of open-market operations?

To increase the money supply by buying government securities

To decrease the money supply by selling government securities

Economics Quiz

Authored by Anthony Owusu

Social Studies

12th Grade

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52 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Assume that X bet £20 on the roll of a die. If the die lands with a six facing upwards, X wins £100; if any other number lands face-up, X loses £20. To an economist, X would be operating under

uncertain conditions.

conditions of risk.

a black market.

It is not possible to say from the information provided.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is most likely to be a variable cost for a firm?

The monthly rent on office space that it leased for a year

The taxes that are paid on employee wages

The franchiser's fee that a restaurant must pay to the national restaurant chain

The interest payments made on loans

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a fixed cost for a chocolate factory over the course of a month?

The cost of electricity (paid quarterly) for running the mixing machines

The cost of cocoa

Depreciation of machines due simply to their age

Overtime pays

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

You decide to go to college instead of working full-time. Which of the following is NOT considered part of the opportunity cost of your decision?

The tuition fees you pay.

The lost wages you could have earned while working.

The cost of textbooks and course materials.

The money you spend on groceries while in college.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When evaluating the true cost of attending university, economists consider all the following EXCEPT:

The upfront cost of attending classes

The income you could have earned working instead of studying.

The social experiences and personal growth gained during college.

The time commitment required for studying and attending classes.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

As someone's income increases, they tend to buy less of good X. Good X is most likely classified as an:

Normal good.

Inferior good.

Luxury good.

Public good.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The demand for product A decreases as there’s a rise in income. This product would be considered a:

Giffen good.

Normal good.

Inferior good.

Substitute good.

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Economics Quiz

Assume that X bet £20 on the roll of a die. If the die lands with a six facing upwards, X wins £100; if any other number lands face-up, X loses £20. To an economist, X would be operating under

Which of the following is most likely to be a variable cost for a firm?

Which of the following is a fixed cost for a chocolate factory over the course of a month?

You decide to go to college instead of working full-time. Which of the following is NOT considered part of the opportunity cost of your decision?

When evaluating the true cost of attending university, economists consider all the following EXCEPT:

As someone's income increases, they tend to buy less of good X. Good X is most likely classified as an:

The demand for product A decreases as there’s a rise in income. This product would be considered a:

The following table shows costs and revenue schedules for a firm.

How much total profit will the firm make at the profit-maximising level of output?

The value of the British pound (sterling) would likely depreciate if there is:

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