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3- Economics- Macro > Multiple Choice > Flashcards

Multiple Choice Flashcards

1
Q

All other things being equal, a signif cut in rate of tax on companys profit is most likely to afffect on ad and lras

A

Increaase both ad and lras

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2
Q

The annual rate of inflation in an economy falls from 5% to 2% but the annual rate of inflation of its main trading partners remains at 5%. As a result, all other things being equal, it is likely that in the lt for this econ

Impact on exports and imports

A

Exports increase

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3
Q

Starting from an initial point of equilibrium on a verticle lras a reduction in ad will lead to a new lr equilibrium position with a lower

A

Price level

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4
Q

The current account of the balance of payments comprises

A

Trade in goods and services, investment income and transfers

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5
Q

What would result in a demand side shock to uk econ- large rise in

A

Uk wages due to wave of strikes

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6
Q

All things being equal, in the lr a fall in the exchange rate is likely to

A

Increase ad because it can reduce the foriegn currency price of exports

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7
Q

How to calculate percentage increase in the oevrall price index

A

X weighting by price index

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8
Q

Which one of the following is a reason why the supply of cars is likely to be price elastci in sr when price of cars increases

A

There is considerable spare capacity in the car industry

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9
Q

Another term for welfare losss

A

Deadweight loss of consumer

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10
Q

There is a reduction in the market demand for product supplied by firms operating in a perfect comp indsutry
What will happen to firm av and marginal rev as a result of this change

A

Av rev and marginal rev both fall

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11
Q

When marginal utility=0

A

Total utility is max

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12
Q

In an econ experinceing an econ boom what is likely to happen to job vacancies

A

Increasing

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13
Q

In a monopolistic comp in sr at profit max price output firm will

A

Make supernormal profits

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14
Q

What count as liquid assets

A

Cash
Balancaes at central bank
Other liqid assets
Not retained profit- as likelyt to. Be used already

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15
Q

Summer holidays at uk seaside towns have become less popular
Uk seaside holldiay towns are affected by seasonal unemployment and increasing structural unemployment
What is momst likely consewudne

A

Cost of living for people who live in uk seaside towns fall

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16
Q

Real gorwth

A

Nomainal-inflation

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17
Q

Each of top five decile groups has expeiernes a fall in tyehir share of total inocme
In ocntrast bottom five decile groups have experinced a sbstanntila increase in their share of total iocme
Thus distrubution of income most likely to hav ebecome

A

Mroe equal

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18
Q

Essentail characterisistc sof customs union

A

Internal trade barriers
Common external tariffs
Common currency

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19
Q

All other things being euqal in which one of the following circumstances is the boe most likely to raise bank rate to maintain fnancal stability

A

Fall in bank liquidity and capital ratios following several years of rapid growth in bank lending and a boom in house prices

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20
Q

Upwards unitary totla rev curve
How will firm ave rev and marginal rev change as firm expands it s output

A

Constant av rev and constant marginal rev

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21
Q

According to the hypothesis of diminishing marginal utility
When marginal utility is zero

A

The total utility from consuming the good is max

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22
Q

Increased output results from specialisation and the divion of lab becuase they enable

A

More efficient use of the available resources

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23
Q

Lr philips curve shows that

A

There is no trade off between reducing inflation and lower unemployment in long run

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24
Q

The bahavour of a consumer buiing a 75 inch large screen tv is biased due to bounded rationality and the anchoring effect
Implies that the choice of which tv to buy is based on the price of

A

The first tv seen and imperfect info about availiable alternatives

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25
Q

Rightwards shift in supply for exchange rate bewteen sterling and eros
Due to an increase in eurozone

A

Compansies buing factories in uk

26
Q

Immobility of lab may lead to a missallocation of resources and market failure

A

A change in pattern of demand results in strutcural unemp

27
Q

As gini coefficient decreasese percentage

A

More equal society

28
Q

Primary measure of unemp in uk is based on the

A

Number of people actively seeking work and avaailble to star work

29
Q

A firm benefits from signif and persistent econ of scale as increase output
Most likely consequence as it grows in size

A

Firms ability to set its own prices will increase

30
Q

Currency is undervalued by less signif diff

A

Purchasing power parity is closer to

31
Q

Rightwards shift in lras and sras is caused by

A

A large increase in teh availbaility of renewable energy within the econ

32
Q

A statemnet associated with behavoural econ theory

A

An individ econ decisions may be biased

33
Q

A reason for gov intervention in a markwet

A

Firms in an oligopolistic market may limit price comp

34
Q

A monopolistically comp firms demand curve is

A

The firms av rev curve

35
Q

A left wards shift of sras is likely to be caused by

A

A decrease in level of tarrifs on imports

36
Q

The existence of neg externalities in consumption results in a misallocation of resources. This is because at the free makret level of output the

A

Msb is less than msc

37
Q

An increase abouve trend level of real gdp (recooving from being below trend level) is likely tol lead to

A

An increase in investment due to accelerator process

38
Q

A kinked demand curve provides an explanation of why the

A

Firms price changes deend on competitors pricing behaviour

39
Q

Despute qe several years, econ has rising unemployment and rate of inflation signif below target rate, all other things being equal, which one of the following actions is the central bank most liekly to take in order to meet the targte for inflation

A

Provide forward guidnece indicating that the bank will continue with its programme of qe

40
Q

All other things beinng equal , which one of the following is most likely to cause the marginal rev product of lab curve in shoe manufacturing industry shift right

A

Increase in market demand for shoes

41
Q

A country experiences a large net capital outflow, the most likley consequence of this n the sr will be a decrease in

A

Its exchange rate

42
Q

A fall in price and increase in the quantity demanded of lemons could have been caused by

A

Favourable weather leading to a record harvest
No shift seen

43
Q

Following flooding described by environ agency as a ‘once in a century event’ there is a sharp increase in the number of residents of a large town who buy additional flood insurance
Biases in decisions seen

A

Availablillity bias and social norms

44
Q

Atc above mr=ar- what changes can be expected as the market moves into lr

A

Some firms will leave the market and the price will rise

45
Q

When trying to calculate diminishing marginal returns to labobur

A

Calculate diff in total output

46
Q

A firm faces a downward sloping demand crve. Firm discovers that any increase or decrease from its current level of output leads to a fall in total rev
This means that at its current output marginal rev is

A

Zero

47
Q

Which one of teh following is the most likely result of a divorfce of ownership from control inan organisation

A

Adopting of satisficing behavour

48
Q

Gov moves from srpc to lrpc as unemployment rate increases- why

A

Econ agets have higher inflation expectations due to intervetion- money illusion

49
Q

Which one of the following is a role of the uks ovr

A

Eval gov performance agianst own fiscal targets

50
Q

Which one of the following would be classified as sa debit item in seocndary income section of current account bop

A

Emergency aid provided to another country following a natural disaster

51
Q

How to calculate comparative advantage

A

Divide by each other comes ot with decimal- to calauclate opp cost

52
Q

Rightwards shift lras leads to

A

An improveenyt in bop on current acccount

53
Q

Cause of globalisation

A

Containerisation

54
Q

Cost of internat trade

A

Less domestic jobs available

55
Q

Main feature of single european market

A

The free moement of capital and labour betwene memebr countries

56
Q

Portfoio investment

A

Any investment in securities intended only for financial gain which does not create a lasting interest

57
Q

Fdi

A

Investment made by a company or individ from one country in business interests in anotehr country

58
Q

One disadv of a fixed exchange rate system is that

A

It can lead to current account imbalances

59
Q

A country experiences a large net caiptal outflow
All other tings beng equal the most likely consequence of this in sr is decrease in

A

Er

60
Q

In highly contestable makret, lr firm most likely to set price at

A

Ar=ac

61
Q

A monopolistically comp fimrs demand crve is

A

Firms av rev curve

3- Economics- Macro (21 decks)

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