18 MCQ practice problems. Select answer, submit, review explanation.
Which of the following components does NOT form part of Aggregate Demand (AD)?
An increase in the marginal propensity to consume (MPC) will cause:
Evaluate which of the following would shift the Long-Run Aggregate Supply (LRAS) curve to the right.
Which index is used to measure the general price level in
an economy?
Distinguish
between structural unemployment and frictional unemployment.
Evaluate the
likely impact of a sustained increase in the inflation rate on the balance of payments in the short
run.
Which of the following is an example of contractionary fiscal policy?
The 'crowding out' effect suggests that increased government borrowing may:
Evaluate the argument that expansionary fiscal policy is more effective during a recession than during an economic boom.
The Monetary Policy Committee (MPC) of the Bank of England has a primary target for inflation of:
Describe the
transmission mechanism through which a cut in interest rates stimulates the economy.
Quantitative easing (QE) can
be described as:
Which of the following is an example of an interventionist
(market-based) supply-side policy?
Evaluate the argument that
privatisation of state-owned enterprises improves economic efficiency.
Explain how
investment in education and training can shift the LRAS curve.
A country's currency appreciates. Analyse the likely impact on its current account balance in the short run.
Evaluate which trade protectionist measure is NOT an example of a tariff.
Explain the concept of the terms of trade and analyse how a deterioration in the terms of trade might affect an economy.