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WorksheetsDemand Side Policy 1
Total questions: 16
Worksheet time: 11mins
Name
Class
Date
1.
What is liquidity?
a)
The amount of money in the conomy that is availabile to spend.
b)
How much investment firms are planning
c)
The amount of money that can be borrowed by consumers
d)
The total value of aggregate demand
2.
What is the transmission mechanism?
a)
The speed at which multiplier effects increase.
b)
The change in consumer incomes caused by quantitative easing
c)
The process by which changes in interest rates ultimately affect GDP.
d)
The Bank of England process for setting interest rates.
3.
How will expansionary policy affect an AS/AD diagram?
a)
AD will shift outward.
b)
AD will shift inward
c)
AS will shift inward
d)
AS will shift outward
4.
What is quantitative easing?
a)
Printing money
b)
A cause of inflation
c)
Selling of government assets
d)
Purchasing of bonds by the Bank of England
5.
When the bank of England reduce interest rates, this will automatically lead to a reduction in the cost of borrowing money for homeowners.
a)
true
b)
false
6.
What is the inflation target that the Bank of England consider when setting interest rates?
a)
0.01
b)
0.02
c)
0.03
d)
0.04
7.
How will an increase in interest rates affect exchange rates
a)
It will cause an appreciation
b)
It will cause a depreciation
c)
It will have no effect
d)
It can cause both an appreciation and a depreciation
8.
Which organisation is reponsible for monetary policy in the UK?
a)
UK Government
b)
The Chancellor of the exchequer
c)
HM Revenue and Customs
d)
The Bank of England
9.
Deflation is
a)
A decrese in the price level
b)
An increase in the price level
c)
a slowing down of changes in the price level
d)
A speeding up of changes in the price level
10.
Economic inactivity is
a)
When someone does not have a job and is not looking for a job
b)
When someone has a job but does not have enough hours
c)
When someone is looking for a job but cannot find one
d)
When someone has too many hours of work and is suffering stress
11.
When imports of goods and servies are greater than goods and services, this is best described as
a)
A Balance of Payments surplus
b)
A balance of payments deficit
c)
A current account surplus
d)
A current account deficit
12.
GNI is
a)
The total value of transactions in the economy
b)
GDP + Net transfers
c)
The number of goods produced in a year
d)
GDP - net exports
13.
A positive output gap is when
a)
Trend growth is negative
b)
Trend growth is positive
c)
Actual growth > trend growth
d)
Actual growth is < trend growth
14.
A recession is
a)
When GDP growth is negative
b)
When GDP growth is positive
c)
Two consecutive quarters of negative growth
d)
Two consecutive quarters of positive growth
15.
Which of the following is an example of a withdrawl from the circular flow
a)
Investment
b)
Exports
c)
Government spending
d)
Savings
16.
Short run AS is shifted by
a)
Changes in Business costs
b)
Changes in the capacity of the economy
c)
Changes in the population
d)
Changes in the quality of education
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