An increase in imports of consumer goods is most likely to be caused by
rise in household income.
fall in the exchange rate.
rise in household saving.
fall in employment.
Which one of the following is most likely to lead to a fall in aggregate
A reduction in the level of unemployment
An increase in spare capacity in the economy
A reduction in the average level of interest rates
An increase in aggregate demand
The underlying trend rate of growth in an economy is declining and the
economy is also experiencing an increase in its rate of unemployment.
Which one of the following is likely to be most effective in dealing with
these problems?
An expansionary fiscal policy and a restrictive monetary policy
A restrictive fiscal policy and supply-side policies
A restrictive monetary and fiscal policy
An expansionary monetary policy and supply-side policies
Other things being equal, increased innovation in an economy is likely to
lead to a
fall in the equilibrium level of output.
fall in the size of the labour force.
leftward shift of the aggregate demand curve
rightward shift of the long-run aggregate supply curve.
An economy is currently operating inside its production possibility
frontier. In the short run, if the rate of growth of aggregate demand is
less than the rate of growth of productive capacity, then the economy is
most likely to experience
an increase in unemployment.
a decrease in its trend rate of growth.
a decrease in imports.
a decrease in output.
Expansionary monetary policy is most likely to
result from a reduction in taxation.
shift the long run aggregate supply curve to the left.
shift the aggregate demand curve to the right.
cause a surplus on the current account of the balance of payments.
A rise in the level of domestic investment will most likely result from a
rise in
the current account deficit.
interest rates.
company profits.
the exchange rate.
A sustained rise in the exchange rate is most likely to increase
international competitiveness.
In recent years, the UK has experienced large deficits on the balance of
payments on current account. Which one of the following would be
least likely to reduce such deficits?
A rise in the exchange rate
A rise in productivity
A rise in income tax rates
The government wishes to increase the trend rate of growth of national
output through the use of supply-side policies. To achieve its objective,
the government would most likely increase its spending on
education and training.
subsidies to failing firms.