Please choose one of the following options for each question:
1. In economics, investment is best defined as
2. A rise in the exchange rate together with a rise in taxes on household income is most likely to
3. All other things being equal, a large rise in interest rates is most likely to lead to an
4. The shift of the short-run aggregate supply curve from SRAS1 to SRAS2 could have been
5 All other things being equal, a government would be undertaking a contractionary fiscal
policy if it reduced
6. Which one of the following policies is most likely to lead to an increase in output and
employment without increasing the rate of inflation?
7. Which one of the following is most likely to reduce inflationary pressures in the UK
8. Which one of the following is most likely to occur in the boom phase of an economic cycle?
9. An increase in aggregate demand is most likely to cause inflation when
10. Choosing between faster economic growth and a satisfactory balance of payments best
11. The shift in the aggregate demand curve from AD1 to AD2 could have been caused by an
12. The underlying long-run trend rate of economic growth can be defined as the
13. All other things being equal, a fall in the exchange rate is likely to
14. If the government is using both fiscal and monetary policies to manage the economy, what
combination of policies is it most likely to implement when the economy is operating at
15. The economy is experiencing a balance of payments surplus on current account and high
unemployment. Which policy is most likely to reduce both the balance of payments surplus
on current account and unemployment?
16. The short-run aggregate supply curve is drawn on the assumption that
17. Which one of the following diagrams indicates the effect on the economy of a general fall in
wage costs and a rise in the level of exports?
18. In the short run, an increase in a budget deficit is most likely to reduce
19. All other things being equal, which one of the following is most likely to reduce a balance of
payments deficit on current account?
An increase in
20. From the information above, it can be concluded that
21. If an economy is operating on its production possibility frontier, the most likely effect of an
increase in the output of capital goods is that its rate of economic growth will
22. All other things being equal, a rise in the value of the pound on foreign exchange markets is
most likely to increase
23. A supply-side policy can be used to increase
24. Which one of the following combinations is most likely to increase aggregate demand (AD) in
the UK economy?
25. All other things being equal, which one of the following is most likely to cause a simultaneous
shift to the right in both an economy’s short-run and long-run aggregate supply curves?