1. Which combination of changes over time in an economy would definitely represent increased
economic growth per capita?
|Average Price Level||Total Output||Total Population||Gini Coefficient|
2. Under which circumstances will the future burden of the national debt on a country increase the
|Increase in the budget deficit||Change in GDP||Price of government bonds|
|A||+ 2% of GDP||+4%||Decreasing|
|B||+ 2% of GDP||+4%||Increasing|
|C||+ 4% of GDP||+2%||Decreasing|
|D||+ 4% of GDP||+2%||Increasing|
3. Country X has a low rate of inflation and a stable currency and unemployed resources. It attracts
$25 billion of direct foreign investment.
What is most likely to be a positive benefit of the inflow of this foreign direct investment for
A Aggregate demand will be boosted through the investment multiplier.
B Country X will have to use its foreign reserves to eliminate any trade deficit.
C The balance of payments will be affected with the outflow of profits to foreigners.
D The rate of inflation will increase if country X tries to increase capacity.
4. A country with an income tax rate X decides to increase its tax rate.
The diagram shows tax revenue will fall.
Why would this happen?
A Fewer goods will be produced.
B People will work fewer hours to maintain incomes.
C Prices will rise.
D There will be an increase in tax avoidance.
5. What are the labels on the axes of a Phillips curve diagram?
|Vertical Axis||Horizontal Axis|
|A||Inflation rate||Unemployment level|
|B||Inflation rate||Unemployment rate|
|C||Price level||Unemployment level|
|D||Price level||Unemployment rate|