Month: August 2019

Which of the following would appear as a credit item in the trade in services balance of the UK’s balance of payments?

Select ONE answer:

1. earnings on German shares owned by UK citizens
2. expenditure by US tourists in the UK
3. the payment by a UK firm to a Japanese firm to transport its goods
4. the purchase of a UK firm by an Indian multinational company

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 2

1. This is a credit item but it appears in the income/primary income section of the current account of the balance payments.
2. Correct: This is a credit item as it is money entering the country. It appears in trade in services under the title ‘travel’ of the current account of the balance payments.
3. This appears in trade in services but as a debit item of the current account of the balance payments.
4. This is a credit item but it appears in the financial account of the balance of payments.

 

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The table below shows the inflation rate for an economy between 2012 and 2015.

What can be concluded from the information?

Select ONE answer:

1. The price level was lowest in 2014.
2. The price level was lowest in 2016.
3. The economy experienced deflation over the whole period.
4. The value of money rose over the whole 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 1

1. Correct: The price level rose over the period 2014 to 2017 and so it was at its lowest in 2014.
2. The price level did fall in 2016 but it was still higher than in 2014.
3. The economy experienced deflation in 2016 but over the period the price level rose.
4. The value of money fell over the period as the price level rose.

 

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Which of the following is not a feature of a ‘good’ tax?

Select ONE answer:

1. certainty
2. convenience
3. durability
4. equity

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 a quality of a good tax.
2. This is a quality of a good tax.
3. Correct: This a characteristic of money but not a feature of a good tax.
4. This is the quality of a good tax.

 

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What do the weights in the Consumer Price Index show?

Select ONE answer:

1. changes in the price of the goods and services purchased
2. changes in the quality of the goods and services purchased
3. the proportion of total expenditure spent on different categories of goods and services
4. the seasonal fluctuations in the price of clothing, food and fuel

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. Prices are multiplied by weights to give a weighted price index.
2. The CPI does not reflect quality changes.
3. Correct: The weights give greater importance to changes in the prices of products that households have devoted a high proportion of their expenditure.
4. The CPI is seasonally adjusted but this is not the function of the weights.

 

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Christine initially has a disposable income of £500 a week and spends £400.

Christine’s disposable income then rises to £750 a week and her spending to £500.

What is Christine’s marginal propensity to consume?

Select ONE answer:

1. 0.4
2. 0.6
3. 0.67
4. 1.0

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: mpc is ∆C/∆Y = 100/250.
2. Incorrect: This is mps. ∆S/∆Y = 150/250.
3. Incorrect: This is apc. C/Y = 500/750.
4. Incorrect: This is the new spending/original income. 500/500.

 

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