WorksheetsNATIONAL ECONOMICS OLYMPIAD(NEO) 2022 – SECOND ROUND
Total questions: 30
Worksheet time: 15mins
Three sisters, Ann, Beth and Cindy, bought a bag of 30 cookies together. Each of them received 10 cookies. Ann paid 80 cents, Beth paid 50 cents and Cindy paid 20 cents. If they had divided the cookies proportionally to the price each paid, how many more cookies would Ann have received? (4 points)
10
9
8
7
6
Ane bought 3 toys. For the first toy she paid half of her money and EUR1 more. For the second toy she paid half of the remaining money and EUR2 more. Finally, for the third toy she paid half of the remaining money and EUR3 more, thus spending all of her money. How much money did she have initially? (4 points)
EUR36
EUR45
EUR34
EUR65
EUR100
A journey from Košice to Poprad through Prešov lasts 130 minutes. The part of the journey from Košice to Prešov lasts 35 minutes. How long does the part of the journey from Prešov to Poprad last? (4 points)
95 minutes
105 minutes
115 minutes
165 minutes
175 minutes
Some diluted juice is to be made out of concentrate and water in the ratio by volume. Juice concentrate is in a 1-litre flask, and the flask is half full. What fraction of this concentrate should be used to produce 2 litres of diluted juice? (4 points)
1/4
1/2
2/7
4/7
All of the concentrate.
60 apples and 60 pears are packed into boxes so that each box contains the same number of apples, and no two boxes contain the same number of pears. What is the largest possible number of boxes that can be packed in this way? (4 points)
20
15
12
10
6
Liam spent all his money buying 50 soda bottles at the store for 1 Euro each. He sells each bottle at the same higher price. After selling 40 bottles, he has 10 Euros more than he started with. He then sells all the remaining bottles. How much money does Liam now have?
(4 points)
70 Euro
75 Euro
80 Euro
90 Euro
100 Euro
When Ria and Flora compared their savings, they found that the ratio of their savings was 5 : 3. Then Ria bought a tablet for 160 Euro and the ratio of their savings changed to 3 : 5. How many Euro did Ria have before buying the tablet? (4 points)
192
200
250
400
420
Elisabeta had a large bag of 60 chocolates. She started by eating one 10th of them on Monday, then one 9th of the remainder on Tuesday, then one 8th of the rest on Wednesday, then one 7th on Thursday and so on until she eats half of the remaining chocolates from the previous day. How many chocolates does she have left? (4 points)
1
2
3
4
6
Country A uses sterling and has a GDP per head of £30,000. Country B uses another currency. If this is converted to sterling at the current exchange rate, its GDP per head is £5,000. Which of the following statements is false? (4 points)
To get a better comparison of output per head, it would be better to convert country B's currency into sterling using purchasing power parities (PPPs).
ountry are similar.
If PPPs were used, it is most likely that B's output per head would seem closer than it does using exchange rates.
Exchange rates generally settle so that the prices of tradable products in each country are similar.
PPPs are the rates which ensure that the prices of all products in each country are similar
None
Suppose that, over time, the share of manufacturing industry in a country's GDP falls. Which of the following statements is true?
1. The quantity of the goods and services produced by manufacturing industry must be falling. 2.The value of the goods and services produced by manufacturing industry must be falling.
(4 points)
Both 1 and 2
1 only
2 only
Neither 1 nor 2.
None
Which of the following statements is true? (5 points)
1. Total welfare is affected by many factors including economic welfare. 2. Economic welfare refers to living standards.
Both 1 and 2
1 only
2 only
Neither 1 nor 2
None
Suppose that over the course of a decade an economy had a stable population and real GNDI increased by 20%. However, an economist estimates that economic welfare increased by less than 20%. Which of the following would not be a factor that could help to explain this? (5 points)
Household production (excluding owner-occupied property) increased by less than 20%.
Output by the underground economy increased by less than 20%.
Leisure time increased by less than 20%.
Prices increased by more than 20%.
None.
Which of the following statements is false? (5 points)
Even in the worst recorded cases of hyperinflation, the price level always took at last a week to double.
Some people lose out if actual inflation turns out to be below the rate they expected.
Some people lose out if actual inflation turns out to be above the rate they expected.
Some people lose out if actual inflation turns out to be equal the rate they expected.
None.
Which of the following statements is false? (5 points)
The GDP deflator is a price index that covers all goods and services included in GDP.
The RPI is a price index that covers a wide range of goods and services bought by households.
The CPI is a price index that covers a wide range of goods and services bought by households.
The CPI generally rises more quickly than the RPI.
None.
In which of the following situations would real GDP increase while the price level stayed the same? (5 points)
The aggregate demand and aggregate supply curves both shifted up by the same amount.
The aggregate demand and aggregate supply curves both shifted right by the same amount.
The aggregate demand curve stayed put but aggregate supply shifted right.
The aggregate demand curve shifted right but the aggregate supply curve stayed put.
None.
Which of the following must always be equal? (5 points)
Actual saving and actual investment in a two-sector economy
Planned saving and planned investment in a two-sector economy
Actual saving and actual investment in a four-sector economy
dPlanned saving and planned investment in a four-sector economy
None.
Which of the following statements is correct in the case of a four-sector economy? (5 points)
G equals all planned government spending.
L equals planned spending on new capital goods.
T equals all planned receipts from taxes.
C is less than disposable income minus planned saving.
None.
Suppose that one month, injections in a four-sector economy are greater than withdrawals. Which of the following statements is false? (5 points)
Planned spending will be greater than output.
Actual investment will be less than planned investment.
Planned investment must exceed planned saving.
Output is likely to be increased.
None.
Suppose we draw the consumption function for a two-sector economy, with disposable income, YDIS, on the horizontal axis and planned consumption, C, on the vertical axis. Suppose we also add a 45° line through the origin, and find that the consumption function intersects this at a YDIS equal to £1,000 billion a year. Which of the following statements is false? (5 points)
The slope of the consumption function at any level of YDIS shows the value of MPCDIS at that level of YDIS.
If YDIS in the economy was £1,000 billion a year, planned consumer spending would also equal £1,000 billion a year.
.
If YDIS in the economy was less than £1,000 billion a year, planned saving would be negative.
The consumption function must be a straight line.
None
Which of the following factors might cause a country's consumption function to shift upwards? (5 points)
A fall in share prices.
A fall in interest rates.
Expectations that the economy will soon go into a recession.
Households deciding to be thriftier.
None.
Suppose banks desire a ratio of reserves to deposits, r, of 4%. And suppose the public desire a ratio of cash to deposits, d, of 2%. Which of the following is correct?
1. The bank deposit multiplier is 25. 2. The money multiplier is 17. (6 points)
Both 1 and 2.
1 only.
2 only.
1 or 2.
Neither 1 nor 2.
Which of the following statements is false? (6 points)
Financial intermediaries offer risk transformation and maturity transformation.
The Bank of England may act as a lender of last resort.
A bank can increase its capital adequacy ratio by switching some funds from advances to buying more company shares.
A bank can increase its capital adequacy ratio by selling some company shares and lending the proceeds as mortgages.
None
Which of the following would not shift the money demand curve to the right? (6 points)
A move which means that all workers who were in the past paid weekly will in future be paid monthly
A rise in incomes.
A rise in wealth.
A fall in the interest rate
None
Which of the following is a shortcoming of the simple multiplier model that the AS-AD model overcomes?
1. The multiplier model ignores the fact that a rise in planned spending which causes a rise in output will also lead to a rise in incomes and the demand for money, and so in turn lead to a rise in the interest rate. 2. The multiplier model ignores the fact that a rise in injections leads to a rise in prices which will cause people to reduce their spending plans. (6 points)
both 1 and 2
1 only
2 only
1 or 2
Neither 1 nor 2
Which of the following arguments for a sloping AD curve is unconvincing? (6 points)
A rise in the price level in a country will tend to lead to a fall in the real value of exports and a rise in the real value of imports.
A rise in the price level in a country will lead to lower real spending because it will lead to lower real wealth.
A rise in the price level in a country will reduce the real value of firms' profits, causing them to reduce planned investment.
A rise in the price level in a country will lead to lower real spending because it will lead to a higher interest rate.
None.
Which of the following statements about the IS curve is false? (6 points)
it shows that the lower is the interest rate, the higher is the equilibrium level of output.
The more responsive planned spending is to changes in the interest rate, the more interest elastic is the IS curve.
A fall in the interest rate will shift IS to the right.
An increase in exports will shift IS to the right.
None
Which of the following statements about the LM curve is false? (6 points)
An increase in the demand for money will shift LM right.
An increase in the supply of money curve will shift LM right.
It shows that the higher is the level of output, the higher is the equilibrium rate of interest.
The more interest elastic is the demand for money, the more interest elastic is the LM curve
None
Suppose that a country is in short-run equilibrium at the point where its aggregate demand curve intersects its aggregate supply curve. Then aggregate demand falls. Which of the following does not help to explain why output may then move to a lower short-run equilibrium level?
(6 points)
Nominal wages may be sticky downwards.
Prices may be sticky upwards.
Individual producers may mistakenly believe that they alone have faced a fall in demand, and so may demand less labour.
Individual workers may mistakenly believe that while nominal wages have fallen, the price level has not.
None
Which of the following statements about a country's long-run aggregate supply curve, LAS, is true? (6 points)
It is vertical throughout its length at the output which would be produced if there were no unemployment.
It is vertical throughout its length at the output which would be produced if there were only natural unemployment.
es forwards at low price levels and is then vertical.
It slop d) It slopes forwards at all price levels.
None.
Suppose an economy is in short-run and long-run equilibrium where its AD, SAS and LAS curves intersect. Then there is an improvement in technology which leads to a higher demand for labour, so increasing the level of natural employment and the level of potential output. Which of the following statements about the new long-run equilibrium position is false? (6 points)
The new LAS curve will be to the right of the original LAS.
The price level will be lower than it started.
The real wage will be higher than it started.
The new SAS curve will be to the left of the original SAS.
None
