The Balance of Payments & The National Economy Mcqs - Set 7

1)   Higher export demand __________ output and a higher MPZ __________ output?

a. reduces, reduces
b. reduces, increase
c. increase, reduces
d. increases, increases
Answer  Explanation 

ANSWER: increase, reduces

Explanation:
No explanation is available for this question!


2)   when the level of income _________ there will be a tendency for the trade balance to improve as imports?

a. increase, increase
b. falls, increase
c. falls, fall
d. increase, fall
Answer  Explanation 

ANSWER: falls, fall

Explanation:
No explanation is available for this question!


3)   Aggregate demand in an economy trading internationally with a government sector can be written as ?

a. AD = C + I
b. AD = C + I + G
c. AD = C + I + G + X + Z
d. AD = C + I + G + X – Z
Answer  Explanation 

ANSWER: AD = C + I + G + X – Z

Explanation:
No explanation is available for this question!


4)   Starting from a balanced budget, for a given tax rate, an increasing in income will cause the government budget to ?

a. move into surplus
b. move into deficit
c. remain unchanged
d. None of the above above
Answer  Explanation 

ANSWER: move into surplus

Explanation:
No explanation is available for this question!


5)   Aggregate demand without a foreign sector is the sum of ?

a. C + 1
b. C + G
c. I + G
d. C + 1 + G
Answer  Explanation 

ANSWER: C + 1 + G

Explanation:
No explanation is available for this question!


6)   If the MPC is 0.5 the multiplier is ?

a. 2
b. 1/2
c. 0.2
d. 20
Answer  Explanation 

ANSWER: 2

Explanation:
No explanation is available for this question!


7)   The multiplier tells us how much __________ changes after a shift in ____________?

a. consumption income
b. investment output
c. savings investment
d. output aggregate demand
Answer  Explanation 

ANSWER: output aggregate demand

Explanation:
No explanation is available for this question!


8)   If desired spending in the economy exceeds income we would expect ?

a. households to save more
b. firms to produce less
c. firms to produce more
d. the MPC to change
Answer  Explanation 

ANSWER: firms to produce more

Explanation:
No explanation is available for this question!


9)   A linear consumption function with a positive slope less than one means that if income increases consumption will ?

a. fall
b. not change
c. fluctuate
d. increase
Answer  Explanation 

ANSWER: increase

Explanation:
No explanation is available for this question!


10)   In a macroeconomic model without foreign trade or a government aggregate demand is the sum of ?

a. personal saving and private investment
b. personal saving and personal consumption
c. personal consumption and private investment
d. None of the above
Answer  Explanation 

ANSWER: personal consumption and private investment

Explanation:
No explanation is available for this question!