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WorksheetsEcon- Macro and Micro
Total questions: 85
Worksheet time: 1hrs 25mins
Which type of economy has central ownership, the government, and lack of individual choice?
Market
Mixed
Command
Traditional
Focusing on a narrow range of products/services that can be produced most efficiently and cost-effectively.
subsistence
specialization
scarcity
bartering
Payment for public goods and services by citizens.
savings
debt
tax
capital
It refers to the lowest wage permitted by law below which if paid by employer will subject him to penalty from the government.
minimum wage
maximum salary
maximum wage
minimum salary
It is consumed to fuel day to day expenditures.
debt
spending
capital
investments
It is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed.
investment rate
accrued interest
interest rate
compound interest
A person who takes the risks that is necessary to seek new business opportunities and develop new ways of doing things.
inventor
scientist
entrepreneur
government
What is used to calculate the price elasticity of demand?
A
B
C
D
The market for wheat is in equilibrium at price P with supply at 40 million tonnes. Due to a drought in the growing season, supply falls to 20 million tonnes. Which immediate action should be taken to maintain the equilibrium price of P?
grant a subsidy to farmers equivalent to PP1
impose an indirect tax equivalent to PP2
plant more wheat to increase supplies to 40 million tonnes
use existing stocks of wheat to increase supplies by 20 million tonnes
The diagrams show the initial demand curve D1 and supply curve S1 for steel in the European Union (EU). In 2018 European steel firms experienced rising energy prices. Which diagram shows the likely impact of this?
A
B
C
D
The table shows a competitive market in equilibrium in two periods. What could explain the change from period 1 to period 2?
an increase in the price of a complement
an increase in the price of a substitute
the imposition of a minimum price of 60 cents by a government
the imposition of an indirect tax on suppliers
The diagram shows the market for sugar which is initially in equilibrium at a price of OP. A government then fixes a maximum price of OP1. What will happen as a result?
a reduction in farmers’ revenue equal to PRSP1
expenditure on sugar will be equal to PRMO
farmers’ revenue would be P1UNO
producer surplus will be P1SP2
The division of labor can lead to increased productivity because:
It reduces the need for specialized skills.
It allows for economies of scale.
It eliminates the need for trade.
It promotes competition among workers.
One of the disadvantages of the division of labor is:
Increased efficiency in production.
Higher levels of job satisfaction.
Monotony and boredom for workers.
Increased opportunities for skill development.
Specialization, which is closely related to the division of labor, refers to:
The geographical distribution of economic activities.
The concentration of resources in specific industries.
The focus on producing a narrow range of goods or services.
The cooperation between firms in a market.
The government's intervention in a mixed economy is primarily aimed at:
Achieving income equality among the population.
Promoting economic growth and development.
Eliminating private ownership of resources.
Maximizing consumer satisfaction and utility.
According to Adam Smith, everyone makes decisions that are best for themselves
MACRO Economics
Opportunity Costs
Invisible Tradeoff Theory
Invisible Hand Theory
Government or other central authority makes all economic decisions
Mixed Economies
Traditional Economies
Market Economies
Command Economies
Which change would best indicate that a country has experienced economic development?
an appreciation in the country’s currency
an improvement in the average citizen’s quality of life
an improvement in the country’s trade balance
an increase in the country’s real GDP
Which change would best indicate that a country has experienced economic development?
an appreciation in the country’s currency
an improvement in the average citizen’s quality of life
an improvement in the country’s trade balance
an increase in the country’s real GDP
What is the best measure of the economic cost of an increase in unemployment?
the additional social security benefits paid plus the loss of tax revenue from newly unemployed workers
the loss of potential exports
the money value of the additional social security benefits paid
the output the unemployed workers could have produced
In an open economy, what is most likely to cause the money supply to fall?
a balance of payments surplus
an increase in the ratio of cash reserves to total deposits in the commercial banking sector
central bank bond purchases from the non-bank private sector
government borrowing from the commercial banking sector
What is the primary goal of supply-side policies?
To increase unemployment by cutting jobs.
To reduce government spending and lower taxes.
To focus solely on environmental regulations.
To increase economic growth by enhancing productive capacity.
Name one type of supply-side policy.
Increased government spending
Regulation of industries
Tax cuts
Exchange rate increase
What is the effect of deregulation on the economy?
Deregulation has no impact on competition or innovation in the market.
Deregulation always leads to economic decline due to lack of control.
Deregulation can stimulate economic growth by increasing competition / Innovation.
Deregulation guarantees increased government revenue and stability.
What role does government spending play in interventionist policies?
Government spending reduces inflation and stabilizes prices.
Government spending has no impact on economic growth or market dynamics.
Government spending stimulates economic activity to increase potential
Government spending is primarily used for tax cuts and deregulation.
Supply-side policies are often centred on:
Raising inflation
Investing in capital - human and infrastructure
Changing the base rate of interest
Changing laws
The tools of fiscal policy are...
Interest rates
Taxes and Government spending
Checks and balances
Open market operations
Fiscal policy is actions taken by ______________ to stabilize the economy.
The federal Reserve
The Air force
the government
Wall street
Expansionary fiscal policies are laws aimed at reducing unemployment. How might Congress use expansionary fiscal policy?
Decrease the discount rate
Increase taxes
Decrease government spending
Increase government spending and decrease taxes
Contractionary fiscal policy are law aimed at reducing inflation. How might Congress use contractionary fiscal policy?
Decrease government spending and increase taxes
Decrease taxes
Send stimulus checks to every person in the economy
Increase government spending
Which is an example of expansionary fiscal policy?
The Federal reserve lowers the discount rate
The government raises taxes on all citizens by 5%
The government increases spending by building more infrastructure
The federal reserve increases the reserve requirement
Which is an example of automatic stabilizer?
Stimulus checks that congress had to vote on
A paycheck from your employer
Unemployment Insurance
Interest on your savings account
Balance of payment is measured as
Difference between visible items of exports and imports
Difference between invisible items of exports and imports
Difference between external and internal flow of gold
Difference between all receipts of foreign exchange and payment of foreign exchange
Balance of trade is measure as
Difference between import and export of goods
Difference between import and export of services
Difference between import and export of capital
Difference between all exports and all imports
Current account records transactions relating to
Export and import of goods
Non factor and factor income
Current transfers
All of these
Balance of payments is in this equilibrium when
Capital account balance + capital account balance is not equal to zero
Capital account balance + capital account is not positive number
Capital account balance + capital account balance is not negative number
All of these
Which of the following is a primary income in the Balance of Payments?
Profits from foreign investments
Exports of goods
Imports of services
Domestic investments
What prevents firms from entering a monopoly?
Barriers to Entry
Technology
Price
Barriers to Travel
Which of the following industries is an example of a monopoly?
utilities/water
department stores
auto industry
commercial airlines
When companies that form on oligopoly cooperate together to set or fix prices at a given level, they are engaging in
Monopoly
Vertical Integration
Collusion
In which market structure do firms have significant pricing power?
Monopolistic Competition
Perfect Competition
Oligopoly
Monopoly
Which market structure is characterised by differentiated products?
Perfect Competition
Monopoly
Oligopoly
Monopolistic Competition
What is a natural barrier to entry in a monopoly?
High start-up costs
Government regulations
Control of a key resource
All of the above
Which of the following is NOT a Market Structure?
Perfect Competition
Oligopoly
Monopoly
Corporation
Differentiation is _________________.
having identical products.
copying another business.
small differences that make your product unique.
having control of the market value.
Sending goods to another country to sell.
import
export
Bringing goods in from another country to sell.
import
export
When a country imports more than exports, it will have....
trade surplus
trade deficit
What is invisible trade?
The trade of services
The trade of goods
The trade of physical products
The trade of raw materials
What is visible trade?
The trade of digital products
The trade of goods
The trade of intellectual property
The trade of services
What is a trade deficit?
When a country's exports exceed its imports
When a country's imports exceed its exports
When a country's exports and imports are equal
When a country's trade is completely restricted
What is a benefit of having a global brand for businesses?
Access to wider markets
Higher unit costs
Supply chain issues
Increased language barriers
Economic growth is a situation where an economy's real GDP increase.
True
False
Which of the following is most likely a characteristic of a developing country?
Low employment rate
High GDP
High technology
True or False Developing Countries have strong infrastructure
True
False
More resources:
Land
Labor
Capital
Consumer
What is a public good?
A good that is both non-excludable and non-rivalrous
A good that is excludable but non-rivalrous
A good that is non-excludable but rivalrous
A good that is both excludable and rivalrous
What is an externality?
A benefit or cost that affects a third party not directly involved in the market transaction
A cost that affects only the buyer in a market transaction
A benefit that affects only the seller in a market transaction
A benefit or cost that only affects the buyer and seller in a market transaction
What is asymmetric information?
Information that is only known to the seller in a market transaction
Information that is only known to the buyer in a market transaction vice versa
Information that is known to both the buyer and seller in a market transaction
Information that is not known to either the buyer or seller in a market transaction
What is the effect of subsidies in addressing market failure?
To encourage the consumption of a good
To discourage the consumption of a good
To increase the price of a good
To decrease the price of a good
What is the role of indirect taxation in addressing market failure?
To encourage the consumption of a good
To discourage the consumption of a good
To provide a revenue source for the government
To provide a subsidy for the production of a good
What is the effect of advertising in addressing market failure?
To increase the demand for a good
To decrease the demand for a good
To provide information about a good
To increase the supply of a good
What is the primary goal of government intervention in the market?
To increase the price of goods
To decrease the price of goods
To increase government revenue
To address market failure and promote market efficiency
