The Multiple Choice Questions Blog

Which of the following is an example of fiscal policy?

Select ONE answer:

1. A change in the exchange rate
2. A change in the level of government spending
3. A change in the rate of interest
4. A change in the money supply

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. A monetary policy measure
2. Correct: Government spending is one of the two fiscal policy measures.
3. A monetary policy measure.
4. A monetary policy measure.

 

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

The diagram below shows three supply curves (labelled S) and three demand curves (labelled D) for the pound sterling (£). The price of sterling is quoted in US$. The original equilibrium is at point X.

There is now a recession in the USA. At the same time, the UK is experiencing a consumer boom.

Which point A, B, C or D will represent the new equilibrium in the market for the pound sterling?

Select ONE answer:

1. A
2. B
3. C
4. D

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 shows a decrease in supply and a decrease in demand for pounds sterling.
2. Correct: A recession in the USA will reduce demand for UK exports and so the demand for pounds sterling. A consumer boom will increase demand for US imports and to purchase these the supply of pounds sterling will increase.
3. This shows a decrease in supply and an increase in demand for pounds sterling.
4. This shows an increase in supply but also an increase in demand for pounds sterling.

 

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

How would a fall in the price level be shown on an aggregate demand (AD) diagram?

Select ONE answer:

1. A movement down the AD curve
2. A movement up the AD curve
3. A shift to the left of the AD curve
4. A shift to the right of the AD curve

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: demonstrates the correct relationship.
2. Would be caused by a rise in the price level.
3. Would be caused by a change in components of aggregate demand.
4. Would be caused by a change in components of aggregate demand.

 

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

Which of the following must occur as a result of deflation?

Select ONE answer:

1. A rise in the value of money
2. A fall in savings
3. A rise in employment
4. A fall in the current account deficit

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: Will occur
2. Not necessarily occur
3. Not necessarily occur
4. Not necessarily occur

 

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

Which of the following will cause an economy to move from point A to point B on the production possibility frontier diagram shown below?

Select ONE answer:

1. A decrease in imports
2. A decrease in interest rates
3. A decrease in consumer spending
4. A decrease in the size of the population

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. Represents an increase in AD and so would move production point from B to A.
2. Represents an increase in AD and AS so would move production point from B to A and/or shift out PPF.
3. Correct: A movement to a point further inside the PPF represents a fall in output.
4. Shift inwards of the PPF rather than the production point.

 

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