Category: Economics

An increase in what choice below will shift the aggregate demand curve in an economy to the right?

Select ONE answer:

1. budget deficit
2. consumer savings
3. general price level
4. interest rate

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 1

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

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

What is likely to be the least effective store of value during a period of rapid inflation?

Select ONE answer:

1. antique furniture
2. fixed interest government securities
3. houses
4. shares of industrial companies

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.

Ruritania’s aggregate demand decreased over the last year.

What might have been the cause of this?

Select ONE answer:

1. a reduction in consumer saving
2. a reduction in direct taxes
3. a reduction in imports
4. a reduction in investment

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.

The current account of the balance of payments for Ruritania changed from £1,000M in 2019 to £-10,000M in 2020.

Assuming that nothing else changes, what is likely to be the impact in 2020 on GDP and the exchange rate in Ruritania?

Select ONE answer:

1. GDP – falls & Exchange rate – appreciates
2. GDP – falls & Exchange rate – depreciates
3. GDP – rises & Exchange rate – appreciates
4. GDP – rises & Exchange rate – depreciates

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.

A country devalues its currency in the expectation that a deficit on the current account of the balance of payments will be reduced.

What is necessary to make this happen?

Select ONE answer:

1. any tariff on imports must be matched by a subsidy on goods to be exported
2. the elasticity of demand for imports and the elasticity of demand for exports must both be greater than 1
3. the rate of domestic inflation is equal to the rate of inflation in the foreign market
4. the sum of the elasticities of demand for domestic imports and the foreign demand for exports is greater than 1

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.