Topic 7- Macroeconomics

Which of the following is NOT an element of fiscal policy?

• Government spending

• Government borrowing

• Taxation

• Exchange rates

Which of the following is associated with a negative Public Sector Net Cash Requirement?

• The government is running a budget deficit

• The government’s expenditure exceeds its income

• The government is running a budget surplus

• Public Sector Debt Repayment (PSDR) is high.

_____ taxes are collected by the Revenue authority from an intermediary, which attempts to pass on the tax to consumers in the price of goods.

Which word correctly completes this statement?

• Regressive

• Progressive

• Direct

• Indirect

If a government has a macro-economic policy objective of expanding the overall level of economic activity, which of the following measures would not be consistent with such an objective?

• Increasing public expenditure

• Lowering interest rates

• Increasing taxation

The currency in country X is the Krone while country Y uses the Euro. Country Y has recently experienced an increase in its exchange rate with Country X. Which of the following effects is likely to result in Country Y?

• A stimulus to exports in Country Y

• An increase in the costs of imports from Country X

• Reducing demand for imports from Country X

• A reduction in the rate of cost push inflation

Are the following statements true or false?

1-Frictional unemployment will be short term

2-Governments can encourage labour mobility if they want to reduce unemployment

• Both statements are true

• Statement 1 is true and statement 2 is false.

• Statement 1 is false and statement 2 is true.

• Both statements are false.

Monetary policy is a government economic policy relating to:

1. 1-Interest rates

2-Taxation

3-Public borrowing and spending

4-Exchange rates

• 1 and 4

• 2 and 3

• 2 and 4

• 3 and 4

Which of the following organisations might benefit from a period of high price inflation?

• An organisation which has a large number of long term payables

• An exporter of goods to a country with relatively low inflation

• A supplier of goods in a market where consumers are highly price sensitive and substitute goods are available

• A large retailer with a high level of inventory on display and low rate of inventory turnover

Which of the following are the goals of macroeconomic policy?

1-Encouraging economic growth

2-Zero inflation

3-Achievement of a balance between exports and imports

4-Encouraging stagnation

• 1 and 2

• 2 and 3

• 2, 3 and 4

• 1, 2 and 3

Which of the following would be an example of cyclical unemployment?

• The entry of school leavers into the labour pool each year

• Lay-offs among agricultural labourers in winter

• Automation of ticketing services in tourism

• Recession in the building industry