Macroeconomics Exercise

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Questions in macroeconomics
Instructor: MA. Bui Huy Khoi

Chapter 1

What is economics?
Top of Form
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Question 1

Resources in an economy:

a) Are always fixed
b) Can never decrease
c) Always increase over time
d) Are limited at any moment in time
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Question 2

Human wants are:

a) Always fixed
) Limited
c) Unlimited
d) Likely to decrease over time
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Question 3

The sacrifice involved when you choose a particular course of action is called the:

a) Alternative
b) Opportunity cost
c) Consumer cost
d) Producer cost
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Question 4

Which of the following is not one of the basic economic questions?

a) What to produce
b) Who to produce for
c) How to produce
d) How to maximise economic growth
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Question 5

The basic economic problems will not be solved by:

a) Market forces
b) Government intervention
c) A mixture of government intervention and the free market
d) The creation of unlimited resources
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Question 6

The free market involves:

a) The free provision of products
b) The subsidising of products by the government
c) Market forces of supply and demand
d) All trade via barter
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Question 7

A mixed economy:

a) Has supply but not demand
b) Has demand but not supply
c) Has supply and demand
d) Has market forces and government intervention
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Question 8

In a command (planned) economy:

a) The price mechanism acts as an incentive
b) Resources are allocated by market forces
c) Individual firms make decisions for themselves about what to produce and how to produce it d) The The public sector is large
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Question 9

The public sector includes:

a) Investors owning companies
b) Government ownership of assets
c) Market forces of supply and demand
d) All trade via barter
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Question 10

Which of the following is a normative statement in economics?

a) More spending by the government reduces poverty
b) Higher taxes lead to less desire to work
c) The UK economy is growing fast relative to other European Union members d) The government should concentrate on reducing unemployment Bottom of Form

The production possibility frontier (curve): the PPF or PPC

Question 1

If an economy is productively efficient:

a) Everyone is wealthy
b) Resources are unemployed
c) More of one product can only be produced if less of another product is produced d) The distribution of income is equal
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Question 2

Economic growth can be shown by:

a) An inward shift of the production possibility frontier
b) A movement down the production possibility frontier
c) An outward shift of the production possibility frontier
d) A movement up the production possibility frontier
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Question 3

As resources are shifted from one industry to another this can be shown by:

a) An inward shift of the production possibility frontier
b) A movement along the production possibility frontier
c) An outward shift of the production possibility frontier
d) A outward shift in the demand curve for the products
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Question 4

In a free market the combination of products produced will be determined by:

a) Market forces of supply and demand
b) The government
c) The law
d) The public sector
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Question 5

If an economy moves from producing 10 units of A and 4 units of B to producing 7 As and 5Bs, the opportunity cost of the 5th B is:

a) 7As
b) 10As
c) 3As
d) 1A
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Question 6

An economy may operate outside the Production Possibility Frontier if:

a) It is not...
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