Economics Multiple Choice Question – 31 July 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which of the following consists only of injections into the circular flow of income?

Select ONE answer:

  1. exports, government spending and investment
  2. government spending, investment and savings
  3. imports, investment and taxation
  4. imports, savings and taxation

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: Exports, government spending and taxation are all injections.
  2. Although government spending and investment are injections, saving is a leakage.
  3. Investment is an injection but savings and taxation are leakages
  4. Imports, savings and taxation are all leakages.

 

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Economics Multiple Choice Question – 30 July 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The diagram below shows a change in a country’s macro-equilibrium price level and real GDP.

Diagram 19

Which of the following might have caused this change?

Select ONE answer:

  1. a decrease in business taxes, not matched by a cut in government spending
  2. a decrease in raw material costs, not matched by an increase in corporate taxes
  3. an increase in exports, not matched by an increase in imports
  4. an increase in wages, not matched by an increase in labour productivity

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. This would cause an increase in SRAS – a shift to the right of the SRAS curve.
  2. This would cause an increase in SRAS – a shift to the right of the SRAS curve.
  3. This would cause an increase in AD – a shift to the right of the AD curve.
  4. Correct: This would increase costs of production and so cause a shift to the left of the AS curve.

 

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Economics Multiple Choice Question – 29 July 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which of the following is a cause of cost-push inflation?

Select ONE answer:

  1. an increase in bank lending
  2. an increase in a budget deficit
  3. an increase in the price of raw materials
  4. an increase in the value of exports sold

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. A cause of demand-pull inflation.
  2. A cause of demand-pull inflation.
  3. Correct: An increase in the price of raw materials would raise firms’ costs of production.
  4. A cause of demand-pull inflation.

 

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Economics Multiple Choice Question – 28 July 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which of the following would cause a shift to the right of the aggregate demand curve?

Select ONE answer:

  1. a decrease in investment
  2. a decrease in the price level
  3. an increase in exports
  4. an increase in labour productivity

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. This will cause a shift to the left of the AD curve.
  2. This will cause a movement along the AD curve.
  3. Correct: Exports are a component of AD. An increase in exports would shift the AD curve to the right.
  4. This would cause a shift to the right of the AS curve.

 

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Economics Multiple Choice Question – 27 July 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

What is a recession?

Select ONE answer:

  1. a decrease in a current account deficit over a sustained period
  2. a decrease in the price of the currency over a sustained period
  3. a decrease in the price level over a sustained period
  4. a decrease in the real gross domestic product over a sustained period

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. This is no specific term for a reduction in a current account deficit.
  2. This is depreciation or devaluation.
  3. This is deflation.
  4. Correct: A recession is a fall in the country’s output over a period of six months or more.

 

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Economics Multiple Choice Question – 26 July 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A firm employs 60 workers, paying each worker £520 a week.

To attract an extra worker, the firm raises the wage of each worker to £540 a week.

What is the marginal cost of employing the 61st worker?

Select ONE answer:

  1. £20
  2. £540
  3. £1,740
  4. £32,940

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. This is the rise in pay each of the original workers receives.
  2. This is the new wage.
  3. Correct: the rise in total wages is £32,940 – £31,200 or £540+(60 * £20)
  4. This is the new total wage bill

 

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Economics Multiple Choice Question – 25 July 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The table below shows the market for a product before the imposition of an indirect tax.

Table 64

What would be the change in the equilibrium price if a tax of £4 was imposed?

Select ONE answer:

  1. £1
  2. £2
  3. £3
  4. £4

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: The initial equilibrium price is £16. When an indirect tax of £4 is imposed, the firms would receive the sale price minus the tax. So now at £20, they will supply what they previously supplied at £16. This will create a new supply curve. The new equilibrium price is now £17, a rise of £1. Consumers are bearing £1 of the tax and the firms £3.
  2. Incorrect
  3. Incorrect
  4. Incorrect

 

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