Month: April 2019

How would a fall in the price level be shown on an aggregate demand (AD) diagram?

Select ONE answer:

1. A movement down the AD curve
2. A movement up the AD curve
3. A shift to the left of the AD curve
4. A shift to the right of the AD curve

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

1. Correct: demonstrates the correct relationship.
2. Would be caused by a rise in the price level.
3. Would be caused by a change in components of aggregate demand.
4. Would be caused by a change in components of aggregate demand.

 

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Which of the following must occur as a result of deflation?

Select ONE answer:

1. A rise in the value of money
2. A fall in savings
3. A rise in employment
4. A fall in the current account deficit

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

1. Correct: Will occur
2. Not necessarily occur
3. Not necessarily occur
4. Not necessarily occur

 

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Which of the following will cause an economy to move from point A to point B on the production possibility frontier diagram shown below?

Select ONE answer:

1. A decrease in imports
2. A decrease in interest rates
3. A decrease in consumer spending
4. A decrease in the size of the population

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

1. Represents an increase in AD and so would move production point from B to A.
2. Represents an increase in AD and AS so would move production point from B to A and/or shift out PPF.
3. Correct: A movement to a point further inside the PPF represents a fall in output.
4. Shift inwards of the PPF rather than the production point.

 

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According to the Marshall-Lerner condition which of the following countries’ balance of trade will improve following a currency devaluation?

Select ONE answer:

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. -0.3 + -0.4 = 0.7, 0.7 <1
2. -0.3 + -0.7 =1,1=1
3. -0.7 + -0.1 = 0.8, 0.8 <1
4. Correct: -0.8 + -0.1 =1.1, 1.1 > 1

 

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Which of the following defines the term recession?

Select ONE answer:

1. A fall in the long run rate of economic growth
2. A sustained fall in the level of government spending
3. The ongoing erosion of the value of real incomes through inflation
4. Two successive quarters of falling Gross Domestic Product

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. Could fall without becoming negative (also likely to be short run).
2. Irrelevant
3. Irrelevant
4. Correct: This is the accepted definition of a recession.

 

This work is licensed under a Creative Commons Attribution 4.0 International License.