The National Economy MCQs

Option A: reduce

Option B: increase

Option C: do not change

Option D: None of the above

Correct Answer: reduce ✔

Option A: MPC and MPT

Option B: MPT and MPZ

Option C: MPC and MPZ

Option D: MPC, MPT and MPZ

Correct Answer: MPT and MPZ ✔

Option A: booms, booms

Option B: recession, recession

Option C: booms, recessions

Option D: recessions, booms

Correct Answer: recessions, booms ✔

Option A: leave output unchanged

Option B: increase output

Option C: reduce output

Option D: increase the MPC

Correct Answer: increase output ✔

Option A: market imperfection

Option B: the law of diminishing returns

Option C: the paradox of thrift

Option D: market failure

Correct Answer: the paradox of thrift ✔

Option A: 1(1-MPC)

Option B: 1/MPS

Option C: 1/MPC

Option D: a or b

Correct Answer: a or b ✔

Option A: marginal propensity to invest

Option B: disposable incomes

Option C: marginal propensity to consume

Option D: average propensity to consume

Correct Answer: marginal propensity to consume ✔

Option A: is less than

Option B: equals

Option C: is greater than

Option D: fluctuates around

Correct Answer: equals ✔

Option A: tax evasion

Option B: poor statistics

Option C: the lags between statistical collection and publication

Option D: smuggling

Correct Answer: tax evasion ✔

Option A: including non-market activities

Option B: adjusted for inflation

Option C: including externalities

Option D: including tax evasion

Correct Answer: adjusted for inflation ✔

Option A: equal

Option B: be less than

Option C: be greater than

Option D: be less or greater than

Correct Answer: equal ✔

Option A: investment, savings, government expenditure

Option B: savings, taxes net of subsidies imports

Option C: consumption investment government expenditure

Option D: consumption taxes imports

Correct Answer: savings, taxes net of subsidies imports ✔

Option A: 3>2>1

Option B: 3=2=1

Option C: 3<2<1

Option D: any measure can be larger or smaller than any other

Correct Answer: 3=2=1 ✔

Option A: produced by the government

Option B: of products produced by a given industry

Option C: of labor supplied by all households

Option D: of goods and services produced in an economy

Correct Answer: of goods and services produced in an economy ✔

Option A: resources and efficiency

Option B: money and efficiency

Option C: money and luck

Option D: resources and a good climate

Correct Answer: resources and efficiency ✔

Option A: legal transactions

Option B: part of the rail network

Option C: legal transactions not declared for tax and illegal activities

Option D: the water distribution system

Correct Answer: legal transactions ✔

Option A: Injections = withdrawals

Option B: There is a Bank Holiday

Option C: Injections withdrawals

Option D: None of these

Correct Answer: Injections = withdrawals ✔

Option A: consumption savings and taxes

Option B: savings government expenditure and imports

Option C: savings taxes and exports

Option D: savings taxes and imports

Correct Answer: savings taxes and imports ✔

Option A: landlords

Option B: peasants

Option C: The army

Option D: politicians

Correct Answer: landlords ✔

Option A: Increasing North Sea oil production

Option B: Reducing unemployment

Option C: Achieving a sustainable rate of economic growth

Option D: Reducing inflation

Correct Answer: Reducing unemployment ✔

Option A: three years

Option B: six months

Option C: a year

Option D: two years

Correct Answer: six months ✔

Option A: wholesale price index (WPI)

Option B: GDP deflator

Option C: Producer price index (PPI)

Option D: consumer price index

Correct Answer: consumer price index ✔

Option A: unemployment rate

Option B: labor force rate

Option C: employment rate

Option D: unemployment population ratio

Correct Answer: unemployment rate ✔

Option A: income-expenditures diagram

Option B: aggregate demand-aggregate supply diagram

Option C: circular flow diagram

Option D: income-price diagram

Correct Answer: circular flow diagram ✔

Option A: reduces, reduces

Option B: reduces, increase

Option C: increase, reduces

Option D: increases, increases

Correct Answer: increase, reduces ✔

Option A: increase, increase

Option B: falls, increase

Option C: falls, fall

Option D: increase, fall

Correct Answer: falls, fall ✔

Option A: AD = C + I

Option B: AD = C + I + G

Option C: AD = C + I + G + X + Z

Option D: AD = C + I + G + X – Z

Correct Answer: AD = C + I ✔

Option A: move into surplus

Option B: move into deficit

Option C: remain unchanged

Option D: None of the above above

Correct Answer: move into surplus ✔

Option A: C + 1

Option B: C + G

Option C: I + G

Option D: C + 1 + G

Correct Answer: C + 1 ✔

Option A: 2

Option B: 1/2

Option C: 0.2

Option D: 20

Correct Answer: 2 ✔

Option A: consumption income

Option B: investment output

Option C: savings investment

Option D: output aggregate demand

Correct Answer: output aggregate demand ✔

Option A: households to save more

Option B: firms to produce less

Option C: firms to produce more

Option D: the MPC to change

Correct Answer: firms to produce more ✔

Option A: fall

Option B: not change

Option C: fluctuate

Option D: increase

Correct Answer: increase ✔

Option A: personal saving and private investment

Option B: personal saving and personal consumption

Option C: personal consumption and private investment

Option D: None of the above

Correct Answer: personal consumption and private investment ✔

Option A: consumption

Option B: investment

Option C: exports

Option D: work in the home

Correct Answer: work in the home ✔

Option A: At the present time

Option B: corrected for tax changes

Option C: corrected for changes in interest rates

Option D: At current prices

Correct Answer: At current prices ✔

Option A: consumption investment exports

Option B: investment exports transfer payments

Option C: investment government expenditure exports

Option D: taxes exports, transfer payments

Correct Answer: investment government expenditure exports ✔

Option A: a final good

Option B: an intermediate good

Option C: an injection

Option D: a leakage

Correct Answer: an intermediate good ✔

Option A: unemployment

Option B: inflation

Option C: economic growth

Option D: All of the above

Correct Answer: All of the above ✔

Option A: compare living standards of different countries

Option B: pay wages b multinational companies

Option C: estimate the costs of economic growth

Option D: convert nominal GDP to real GDP

Correct Answer: compare living standards of different countries ✔

Option A: taxes

Option B: prices

Option C: exchange rates

Option D: interest rates

Correct Answer: prices ✔

Option A: investment + tax + exports

Option B: savings + government expenditure + exports

Option C: investment + government expenditure + imports

Option D: investment + government expenditure + exports

Correct Answer: investment + government expenditure + exports ✔

A. consumer expenditure government expenditure and investment
B. consumer expenditure investment government expenditure and exports less imports
C. consumer debt investment debt and government debt
consumer expenditure and investment

Correct Answer: consumer expenditure government expenditure and investment ✔

Option A: the slump to the expansion

Option B: peak to peak

Option C: peak to trough

Option D: trough to peak

Correct Answer: peak to peak ✔

Option A: wholesale price index (WPI)

Option B: Consumer price index (CPI)

Option C: GDP deflator

Option D: Producer price index (PPI)

Correct Answer: GDP deflator ✔

Option A: economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s

Option B: The classical model to explain the prolonged existence of high unemployment during the Great Depression

Option C: fine tuning during the 1960s

Option D: the economy to grow at a rapid rate during the 1950s

Correct Answer: The classical model to explain the prolonged existence of high unemployment during the Great Depression ✔

Option A: imperfectly competitive markets:

Option B: Only the long run adjustments to equilibrium in the economy

Option C: The functioning of individual industries and the behavior of individual decision-making units business firms and households

Option D: the economy as a whole

Correct Answer: the economy as a whole ✔