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ECONOMICS FINAL REVISION

Total questions: 49

Worksheet time: 29mins

Name
Class
Date
1.

WHY DOES A TRANSITION ECONOMY HAVE HIGH UE AND HIGH INFLATION

a)

TRANSITION ECONOMIES ALWASY LEAD TO STAGFLATION

b)

REMOVING CEILING PRICES LEAD TO INFLATION AND THE PROFIT MOTIVE FOR PRIVATE FIRMS CAUSE UE

c)

REMOVING FLOOR PRICES LEAD TO INFLATION AND THE PROFIT MOTIVE FOR PRIVATE FIRMS CAUSE UE

d)

GOVERNMENT THAT REPLACE COMMUNISM DONT CARE ABOUT UNEMPLOYMENT AND LIEK TO SPEND BIG

2.

WHETHER TO BE VEGETARIAN , VEGAN OR NORMAL IS AN EXAMPE FO WHCH ECONOMIC QUESTION

a)

THE WHAT

b)

THE WHO

c)

THE HOW

d)

THE NO COW OPTION

3.
Of the three major economic questions, which of the following is the best example of a "How?" question?
a)
Should we produce more heavy fleece coats? 
b)
Should we collect tolls on turnpikes using human toll collectors or mechanized toll machines? 
c)
Should we build log homes or build factories from bricks? 
d)
Should we spend more on health care?
4.

WHEN THE PRICE OF FISH INCREASES SIGNIFICANTLY THE PRICE OF BEEF WOULD BE EXPECTED TO

a)

FALL

b)

STAY THE SAME

c)

INCREASE

d)

NOT ENOUGH INFORMATION TO TELL

5.

THE ELASTICITY OF DEMAND FOR FISH IS NOT BASED ON

a)

THE COST AS A % OF INCOME

b)

THE SUPPLIES KEPT BY PRODUCERS TO CATER FOR INCREASED DEMAND

c)

BEING A STAPLE OF FAMILY MEALS

d)

NONE OF THESE OPTIONS

6.

The medication known as insulin has seen a decrease in demand of 2%, while the price has increased 10%

a)

5 inelastic

b)

5 elastic

c)

.2 inelastic

d)

.2 elastic

7.
The market for goldfish is competitive. From year 1 to year 2, both the price and the quantity of goldfish increase. This is most likely caused by:
a)
An increase in the supply
b)
A decrease in the demand
c)
An increase in the demand
d)
A decrease in both the demand & the supply
8.

THE OBJECTIVES OF A GOOD MARKET FOR CONSUMERS ARE

a)

LIMITED MARKET FAILURE , MACROECONOMIC STABILITY AND FULL EMPLOYMENT

b)

LOW PRICES , QUALITY AND COMPETITION

c)

CHEAP PRICES , CONSUMER LOYALTY AND LIMITED GOVERNMENT INTERVENTION

d)

ALL OF THESE OPTIONS

9.

THE OBJECTIVES OF A GOOD MARKET FOR PRODUCERS ARE

a)

SUPERNORMAL PROFIT, MARKET CONCENTRATION, MONOPOLY POWER

b)

COLLUSION , ABNORMAL PROFITS , BRAND LOYALTY

c)

BARRIERS TO ENTRY , ACCESS TO TECHNOLOGY , EFFICIENCY,PROFITABILTY

d)

ALL OF THESE OPTIONS

10.

WHEN DEMAND IS GREATER THAN SUPPLY - THE MOST LIKELY IMPACT WILL BE

a)

PRICES WILL RISE IN THE SHORT RUN AND FALL IN THE LONG RUN

b)

PRICES WILL RISE IN THE SHORT RUN AND IN THE LONG RUN

c)

PRICES WILL FALL IN THE SHORT RUN AND FALL IN THE LONG RUN

d)

PRICES WILL FALL IN THE SHORT RUN AND IN THE LONG RUN

11.
A market failure is best described as
a)
The idea that market forces of supply and demand always provide the maximum benefit for society
b)
The idea that market forces of supply and demand do not always provide the maximum benefit for society
c)
The concept that a decision made by one party can have negative effects on another party
d)
The concept that a decision made by one party can have positive effects on another party
12.
Government regulations exist to
a)
Increase economic freedom
b)
Protect consumers from negative externalities
c)
Punish people who intervene in the free market
d)
Provide incentives to privatize
13.

THE LEAST INFLATIONARY FORM A OF A TRADE BARRIER IS

a)

QUOTA

b)

SUBSIDY

c)

TARIFF

d)

CUSTOMS TAX

14.

What is the result of nations specializing in the production of goods?

a)

decreasing prices

b)

economic efficiency

c)

self-sufficiency

d)

incentive to trade

15.

Who benefits from the depreciation of the Japanese yen relative to the Euro?

a)

European consumers of European Goods

b)

Japanese consumers of Japanese Goods

c)

European consumers of Japanese Goods

16.

What is the key to trade?

a)

Self-Sufficiency

b)

Specialization

c)

Technology

d)

Wealth

17.
This is the most restrictive of the trade restrictions a nation can use to close off all importation of a product.
a)
tariff
b)
quota
c)
subsidy
d)
embargo
18.
Infant industries can be helped in the world market by giving those industries a 
a)
subsidy
b)
quota
c)
embargo
d)
tariff
19.

What was the primary purpose NAFTA?

a)

To reduce trade barriers among the US, Canada, and Mexico

b)

To reduce trade barriers among Central America and Mexico

c)

To reduce trade barriers among Brazil and Mexico

d)

To encourage free trade between the US, Europe, and Canada

20.
Which of the following is most likely to cause an appreciation of the $A?
a)
A fall in tourism debits.
b)
A rise in the inflation rate.
c)
Speculative selling of $A’s.
21.
Portfolio investment by foreigners into Australia will
a)
increase the capital account surplus.
b)
reduce the current account deficit.
c)
generate future income credits in the current account.
d)
appear in the official section of the capital account.
 
22.
Foreign goods and services purchased from sellers in other countries.
a)
Import
b)
Scarcity
c)
Supply
d)
Trade Barrier
23.
What are some positive effects of Globalisation ?
a)
Increased freedom to travel and immigrate,better access to medicine,information, and technology.
b)
Lower prices for developed countries and low paying jobs in underdeveloped countries
c)
Less pollution in the world
d)
All of the above
24.
Which of the following is not likely to be associated with globalisation? 
a)
higher levels of protection against cheap foreign imports 
b)
an increase in exports as a proportion of nations’ gross domestic product (GDP) 
c)
growth in the in􏰀uence o􏰉 􏰊ultinational corporations
d)
higher rates of economic growth for countries which increase their trade openness 
25.

inflation hurts those on low incomes and savers because it decreases their

(a)  

26.

the most common type of inflation caused by high levels of confidence and speculation is

(a)  

27.

What is the most likely Macroeconomic Objective Conflict between GDP Growth and Stable inflation?

a)

Unemployment will rise

b)

Environmental issues

c)

Prices are likely to go up with growth

d)

Distribution of wealth

28.

Which of the following objectives might conflict with the objective of economic growth?

a)

Sustainable Environment

b)

Stable inflation

c)

High employment levels

d)

Distribution of Wealth

29.

The total value of all final goods and services produced in a country in a given year.

a)

Gross Domestic Product

b)

Consumer Price Index

c)

Inflation

d)

Unemployment

30.

Unemployment that rises during economic downturns and falls when the economy improves.

a)

Seasonal Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Cyclical Unemployment

31.

The main goal of SSPs is to

a)

increase SRAS

b)

increase LRAS

c)

increase AD

d)

reduce inflation

32.

Deregulation is an example of

a)

Industrial policy

b)

Encouraging competition

c)

Incentive-related policies

d)

Labour market reforms

33.
Which of the following would be an expansionary fiscal policy (increasing economic growth)?
a)
lowering income tax
b)
raising the value of £
c)
printing money
d)
lowering government expenditure (spending)
34.

Aggregate supply policies usually slow inflation by:

a)

slowing AD and the pressures created by widespread shortages of goods and services and excess expenditure.

b)

reducing imported inflation caused by inefficiency overseas.

c)

easing cost pressures on domestic prices through boosting efficiency and competition.

d)

reducing society’s inflationary expectations in the short term.

35.

Inflation tends to occur

a)

during a recession because firms make big profits while pushing wages to low levels and their spending can push up prices over time

b)

during the intermediate stage of the AS curve when prices reach around 3% and unemployment is low

c)

when the economy reaches the limits of its PPC and it's factors of production or firms have increased costs of production usually in a boom

d)

when there are too many good for the money and so people have to compete to get what they want

36.

Higher interest rates

a)

Make foreigners decide to buy more of a country's government bonds

b)

Attracts portfolio flows to a country

c)

Controls inflationary pressures

d)

All the above

37.

When the US imports more from Mexico, demand for peso decreases, and the peso appreciates. At the same time, the us dollar will depreciate.

a)

True

b)

False; when the US imports more from Mexico, demand for peso decreases, and the peso depreciates. At the same time, the us dollar will depreciate.

c)

False; when the US imports more from Mexico, demand for peso increases, and the peso appreciates. At the same time, the us dollar will appreciate.

d)

False; when the US imports more from Mexico, demand for peso increases, and the peso appreciates. At the same time, the us dollar will depreciate.

38.
All final goods and services that make up GDP can be expressed in the form:
a)
GDP = C + I - G + (X + M).
b)
GDP = C + I + G + (X + M).
c)
GDP = C + I + G + (X - M).
d)
GDP = C + I + (X - M).
39.
A worker who was laid off due to a downturn in the business cycle would be considered
a)
frictionally unemployed.
b)
structurally unemployed.
c)
cyclically unemployed.
d)
seasonally unemployed.
40.
What is happening to the economy in a period of economic contraction?
a)
GDP is rising and unemployment is falling.
b)
GDP is rising and unemployment is rising.
c)
GDP is falling and unemployment is rising.
d)
GDP is falling and unemployment is falling.
41.

As a macroeconomic indicator, it refers to the percentage of the population that is:

•OUT of work.

•LOOKING for work.

•WILLING to work.

a)

Inflation

b)

Unemployment

c)

Monetary Policy

d)

Growth Domestic Product

42.
Taxing & spending to help the economy grow is referred to as
a)
expansionary policy
b)
monetary policy
c)
contractionary policy
d)
budget deficit
43.
Fiscal Policy is concerned with
a)
Government Spending and taxation
b)
Consumer spending and productivity
c)
Government spending and the money supply
d)
Taxation and inflation
44.

Which of the following is NOT an example of supply-side policies?

a)

Deregulation

b)

Competition policies

c)

Retraining and upgrading workers' skills

d)

taxing on foreign goods

45.

Aggregate supply policies usually slow inflation by:

a)

slowing AD and the pressures created by widespread shortages of goods and services and excess expenditure.

b)

reducing imported inflation caused by inefficiency overseas.

c)

easing cost pressures on domestic prices through boosting efficiency and competition.

d)

reducing society’s inflationary expectations in the short term.

46.

Which of the following outcomes would hypothetically suggest that the Australian government’s aggregate supply policies were partly ineffective?

a)

The NAIRU continued to increase in the long term.

b)

The sustainable rate of economic growth was stronger, without an inflationary breakout.

c)

Cost inflation slowed and many goods and services became cheaper.

d)

Average real per capita incomes were larger and purchasing power greater.

47.

The central idea of supply-side economics is that certain types of tax cuts will increase:

a)

Money supply

b)

Imports

c)

Aggregate Demand

d)

Aggregate Supply

48.
a)
DEMAND PULL INFLATION
b)
COST PUSH INFLATION 
c)
DEFLATION 
d)
MICROECONOMICS REFORM 
49.
REMOVED BY
a)
INCREASING TAXES
b)
INCREASING INTEREST RATES 
c)
BUDGET SURPLUS
d)
BUDGET DEFICIT