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Worksheetsrevisions
Total questions: 21
Worksheet time: 13mins
The recession phase of the trade cycle
A. Is often caused by excessive consumer expenditure.
B. Is normally characterised by accelerating inflation.
C. Is most prolonged when the country has high levels of imports.
D. Is usually caused by falling aggregate monetary demand.
Supply side policy is designed to
A. Raise the level of aggregate monetary demand in the economy.
B. Manage the money supply in the economy.
C. Improve the ability of the economy to produce goods and services.
D. Reduce unemployment by limiting the supply of labour.
The effects of low real interest rates include all of the following EXCEPT which ONE? .
A. Credit-based sales will tend to be high
B. Nominal costs of borrowing will always be low.
C. Business activity will tend to increase.
D. Investment will be encouraged.
In the circular flow model of the economy, the level of national income will always reach equilibrium because:
A. Injections and withdrawals are always equal.
B. Withdrawals are a function of the level of income.
C. Governments will change taxes and expenditure to ensure equilibrium.
D. Expenditure equals income.
All of the following government policies would tend to raise national income over time EXCEPT which ONE?
A. Increased expenditure on the economic infrastructure.
B. Tax cuts to encourage higher demand from consumers.
C. Policies to encourage the training of labour.
D. Financial incentives to encourage personal and corporate saving.
Which ONE of the following would lead to a fall in the value of the multiplier?
A. A decrease in the marginal propensity to consume.
B. A fall in the level of public expenditure.
C. Consumers saving a lower proportion of their income.
D. A decrease in the marginal propensity to import.
Which ONE of the following would lead a country’s balance of payments current account to move towards a surplus?
A. A rise in commodity imports.
B. An inflow of foreign capital into the economy.
C. An increase in foreign tourism into the country.
D. An increase in government tax receipts.
All of the following are benefits for a business from depreciation (reduction) in the rate of exchange for the country’s currency EXCEPT which ONE?
A. The business could charge lower prices for its exports.
B. Imported raw materials used by the business would be cheaper.
C. The business could raise profit margins on exports without losing sales.
D. In its home market, the business would face reduced competition from imports.
A slowdown in economic growth in the US would be transmitted to the rest of the world by all EXCEPT which ONE of the following processes?
A. A fall in US interest rates.
B. A fall in the US demand for imports.
C. A decline in the level of US capital flows to the rest of the world.
D. Falling US stock market prices leading to similar falls in other countries.
The balance of payments accounts are defined as:
A. The difference between the government’s receipts and its expenditure over the period of a year.
B. The difference between the exports of goods and services and imports of goods and services over the period of a year.
C. The surplus or deficit on a country’s international trade over a given period.
D. A statement of the economic transactions between residents of a country and the rest of the world over a given period.
All of the following are disadvantages of inflation EXCEPT which ONE?
A. It redistributes wealth from debtors to creditors.
B. It reduces international competitiveness.
C. Market price signals are distorted.
D. Fixed income earners experience a fall in real income.
An expansionary fiscal policy would be most likely to reduce unemployment if the country had:
A. A high marginal propensity to import
B. A low marginal propensity to save.
C. A high marginal tax rate.
D. A low marginal propensity to consume.
If a country were to join a free trade area, its business sector would gain because:
A. It could get tariff-free raw materials from countries inside the free trade area.
B. There would be exchange rate stability between the member countries.
C. Prices of competitors from countries not in the free trade area would rise.
D. There would be fewer barriers to establishing subsidiaries in other countries in the free trade area
All of the following are reasons for trans-national companies locating production of a good in more than one country except one. Which ONE is the EXCEPTION?
A. The existence of trade barriers.
B . Significant transport costs.
C. Economies of scale in production.
D. Differences in demand conditions between countries.
All of the following are characteristics of a common market EXCEPT which ONE?
A. Free trade in goods and services among member states.
B. Common levels of direct taxation.
C. Free movement of factors of production between member states.
D. A common external tariff
All of the following are features of globalisation EXCEPT which ONE?
A. Rising trade ratios for countries.
B. Increased international capital flows.
C. Improved terms of trade for all countries.
D. Reduced barriers to international factor movements.
The process of globalisation leads to all of the following EXCEPT which ONE?
A. Increasing foreign competition in domestic markets.
B. Decreasing interdependence of national economies.
C. Greater international division of labour.
D. Rising levels of international trade relative to national income
Multinational companies locate production in more than one country for all of the following reasons EXCEPT which ONE?
A. The existence of trade barriers.
B. High transport costs.
C. Capital is internationally immobile.
D. To increase market share.
Which of the following is the most appropriate for indicating long term shareholder wealth?
A. Net present value
B. Rate of return on capital
C. Earnings per share
D. Profit
Which of the following groups are stakeholders in a business organisation?
(i) Employees
(ii) Shareholders
(iii) Management
(iv) Customers
(v) Suppliers
A. (i), (ii) and (iii) only
B. (i), (ii), (iii) and (iv) only
C. (ii) only
D. All of them
with an example explain how does each condition of demand affects the aggregate demand curve
