Month: June 2022

An economy is operating at a point inside its production possibility curve.

Why is this described as inefficient?

Select ONE answer:

1. Individuals are enjoying too much leisure.
2. Labour and capital are combined in the wrong proportions.
3. More of one good can be produced without decreasing production of another.
4. There are shortages of some goods and an excess supply of others.

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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

In an open economy with a flexible exchange rate, the rate of interest is increased.

Other things being equal, what will be the effect of this increase?

Select ONE answer:

1. There will be a capital outflow.
2. The exchange rate will appreciate.
3. Inflation will rise.
4. Imports will become more expensive.

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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

What will cause an immediate rise in the size of a country’s labour force?

Select ONE answer:

1. an increase in the birth rate
2. an increase in the age of retirement
3. an increase in the school leaving age
4. an increase in the number of redundancies

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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

Country A has a comparative advantage in producing Barley and country B in producing Aeroplanes.

However, the countries choose not to specialise and trade.

What is a valid reason for this behaviour?

Select ONE answer:

1. The exchange rate lies within the countries’ opportunity cost ratios.
2. There is immobility of factors of production between the countries.
3. Trade is based on absolute rather than comparative advantage.
4. Transport costs are high relative to the opportunity cost differences between the countries.

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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

When is an economy likely to experience a deterioration in its terms of trade?

Select ONE answer:

1. when demand for its exports increases
2. when the trade weighted value of its currency depreciates
3. when the interest rate is increased
4. when there is a fall in the average price of its imports

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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