What is the short run?
A A period of time in which all factors of production are fixed
B A period of time in which all factors of production are variable
C A period of time in which at least one factor of production is fixed
D A period of time in which at least one factor of production is variable
Your answer
[1]
What is the most likely explanation of the movement from X to Y in the diagram below?
A A decrease in the natural rate of unemployment
B An adjustment in inflationary expectations
C Contractionary fiscal policy
D Money illusion
Your answer
[1]
A change in the price of good X causes the demand for good Y to increase by 4.5%. The cross elasticity of demand between the two goods is 1.7. If the price of good X is now £2.50, what was its original price?
A £2.32
B £2.44
C £2.49
D £2.57
Your answer
[1]
What would cause the exchange rate to depreciate?
A An increase in domestic incomes
B An increase in incomes abroad
C Export subsidies
D Technological advancement of domestic goods
Your answer
[1]
[1]
What is the reward to labour as a factor of production?
A Interest
B Profit
C Rent
D Wages
Your answer
[1]
A resident of London being protected by Trident, the UK’s nuclear defence system, does not affect a resident of Sunderland’s ability to be protected by Trident. Which feature of a public good is described here?
A Non-excludability
B Non-rejectability
C Non-rivalry
D Zero opportunity cost
Your answer
[1]
What explains a movement from X to Y in the diagram below?
A A decrease in corporation tax rates
B An exchange rate depreciation
C An increase in interest rates
D An increase in the real value of households’ wealth
Your answer
[1]
What is most likely to cause a decrease in wealth inequality?
A A decrease in capital gains tax
B A decrease in income inequality
C An increase in house prices
D An increase in the tax-free inheritance allowance
Your answer
[1]
What is most likely to lead to allocative efficiency being achieved in an industry that is a natural monopoly?
A Collusion
B Competition policy
C Information provision
D Regulation
Your answer
[1]
What is an example of a supply side policy measure?
A Imposing a tariff
B Increasing interest rates
C Privatisation
D Quantitative easing
Your answer
[1]
What is the impact of the Marshall-Lerner condition holding?
A An exchange rate appreciation will only reduce a current account deficit in the long run
B An exchange rate appreciation will reduce a current account deficit
C An exchange rate depreciation will only reduce a current account deficit in the long run
D An exchange rate depreciation will reduce a current account deficit
Your answer
[1]
What is the most likely cause of a movement from X to Y in the diagram below?
A A rival firm entering the market increases the cost of inputs into the production process
B Organisational slack increases as a result of a firm developing monopoly power
C The growth of the industry results in more individuals undertaking relevant education or training
D Workers become less motivated after the firm they work for takes control of another firm in the industry
Your answer
[1]
In response to a global recession, Central Banks in ten closely linked economies reduce interest rates by an average of 1.5%. What is the likely impact on one of these economies where its Central Bank decided to reduce interest rates by 0.5%?
A Hot money will flow in, causing the exchange rate to appreciate
B Hot money will flow in, causing the exchange rate to depreciate
C Hot money will flow out, causing the exchange rate to appreciate
D Hot money will flow out, causing the exchange rate to depreciate
Your answer
[1]
What efficiencies occur in the model of perfect competition in the long run?
A Allocative and dynamic efficiency
B Allocative, dynamic and productive efficiency
C Allocative, productive and X efficiency
D Allocative, dynamic, productive and X efficiency
Your answer
[1]
What is classed as narrow money?
A Commercial banks’ deposits at the Bank of England
B Government bonds with a maturity of less than five years
C Money held in savings accounts
D Retail deposits held current accounts
Your answer
[1]
What would cause unit labour costs to decrease?
A A decrease in corporation tax
B An increase in output
C An increase in the National Living Wage
D An increase in the quality of capital equipment
Your answer
[1]
Use the information below to calculate the size of the national income multiplier.
Your answer
[1]
What is likely to be required in an economy where money does not exist?
A A barter system
B A central bank
C Price controls
D Protectionism
Your answer
[1]
How does comparative advantage explain why the UK imports cars from Germany?
A German car manufacturers can export tariff free to the UK
B Germany can produce cars at a lower opportunity cost than the UK
C Germany can produce cars more efficiently at a lower cost of production than the UK
D Germany is located closer to the UK than US car manufacturers
Your answer
[1]
When will supply side policy be ineffective?
A The marginal propensity to save is high
B The real interest rate is close to zero
C There is a large negative output gap
D There is significant demand-pull inflation
Your answer
[1]
Using the table below, what has happened to the three firm market concentration ratio in the global mobile telephone market between 2010 and 2019?
| Firm | 2010 Market Share (%) | 2019 Market Share (%) |
| Apple | 33.2 | 24.8 |
| Huawei | 0 | 10.6 |
| Nokia | 37.6 | 0.4 |
| Others | 18.8 | 32.9 |
| Samsung | 2.4 | 31.3 |
A Decreased by 0.6%
B Decreased by 6.1%
C Decreased by 6.5%
D Decreased by 16.7%
Your answer
[1]
What type of inefficiency is illustrated at (Q1, P1) in the diagram below?
A Allocative
B Dynamic
C Productive
D X
Your answer
[1]
What is a component of the Human Development Index?
A Air quality
B GDP per capita
C Life expectancy
D Proportion of population with tertiary education
Your answer
[1]
What could cause wages in an occupation to be lower than in other occupations?
A A long training period is required before starting the job
B A high proportion of workers in the occupation are members of a trade union
C Wages take up a high proportion of total costs
D Workers have a high marginal revenue product of labour
Your answer
[1]
In 2014, researchers found that up to a third of women were not taking folic acid supplements in the first 12 weeks of their pregnancy. In response the government increased its efforts to provide information to women about the need for folic acid to aid the healthy development of their baby’s spine. On the basis of this information, what type of good is folic acid?
A A demerit good
B A good with negative externalities of consumption
C A good with positive externalities of consumption
D A merit good
Your answer
[1]
Using the table below, what was the inflation rate in 2017?
Your answer
[1]
Wood is used to make paper and furniture, amongst other things. What type of demand is this?
A Competitive demand
B Composite demand
C Joint demand
D Market demand
Your answer
[1]
[1]
In 2008, Northern Rock was taken into state ownership, following a crisis in which customers queued outside branches in large numbers to withdraw their savings concerned they may not get their money back. What type of financial regulation would have reduced the risk of this?
A Competition policy
B Quantitative easing
C Requiring banks to hold a higher proportion of deposits as liquid assets
D Reducing the central bank rate of interest
Your answer
[1]
31 Using Fig. 1.1, explain the relationship between the budget deficit and national debt between 2010 and 2019.
[2]
Explain, using an example from Extract 1, what is meant by capital expenditure.
[2]
33* Evaluate, with the use of an appropriate diagram(s), whether ending austerity is likely to result in
the government achieving higher levels of economic growth.
[15]
Using Fig. 2.1, explain what happened to the price of water and electricity between 1990 and 2018.
[3]
Explain the likely objective of a water or electricity firm if it operated in the public sector.
[3]
Evaluate, using the information in Extract 2, whether the likely objective of a private sector water or electricity firm justifies taking them into public ownership.
[8]
Using Fig. 3.2, explain the relationship between air travel and carbon dioxide emissions.
[2]
38* Evaluate, using the information in Extract 3, the economic implications of limiting individuals to
one return flight a year.
[15]
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