The Multiple Choice Questions Blog

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.

When the rate of inflation is lower than was expected, what is the likely impact on both lenders and borrowers in an economy?

Select ONE answer:

1. effect on lenders – beneficial & effect on borrowers – beneficial
2. effect on lenders – beneficial & effect on borrowers – harmful
3. effect on lenders – harmful & effect on borrowers – beneficial
4. effect on lenders – harmful & effect on borrowers – harmful

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.

Doctors are concerned about the negative health effects of high-caffeine drinks.

When would a tax on high-caffeine drinks be LEAST effective in improving health?

Select ONE answer:

1. when the demand for high-caffeine drinks is income elastic
2. when the demand for high-caffeine drinks is income inelastic
3. when the demand for high-caffeine drinks is price elastic
4. when the demand for high-caffeine drinks is price inelastic

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.

Governments are trying to reduce the burden of transfer payments in economies with an ageing population.

Which policy would help to achieve this aim?

Select ONE answer:

1. introducing financial support for university students
2. linking pension increases to the consumer price index during inflation
3. raising the retirement age
4. reducing state pensions to finance an equal rise in unemployment benefit

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.

Which statement is NOT an argument in support of the process of privatisation?

Select ONE answer:

1. Private companies are motivated to make the best use of their resources.
2. Privatisation allows more firms to enter an industry, increasing competition in the market.
3. Privatisation can create companies that exploit the consumer.
4. Selling state-owned assets to the private sector raises significant revenue for the government.

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.