Economics MCQs

Page No. 235

If there is cyclical unemployment in the economy the government might ?


a Increase interest rates


bEncourage savings


c Cut taxes


dReduce government spending


View Answer Encourage savings

The natural rate of unemployment is likely to fall if ?


a unemployment benefits increase


bIncome tax increases


cMore training is available for the unemployed


dGeographical immobility increases



If people are made unemployed because of a fall in aggregate demand this is known as ?


aFrictional unemployment


bSeasonal unemployment


cCyclical unemployment


dStructural unemployment


View Answer Seasonal unemployment

If employees cannot accept a job because of the costs of moving this is known as ?


aOccupational immobility


bCyclical unemployment


c Structural immobility


d Geographical immobility


View Answer Cyclical unemployment

A profit maximising firm will employ labour up to the point where ?


aMarginal revenue = marginal product


b Marginal cost = marginal product


cMarginal revenue product = average cost of labour


dMarginal revenue product = marginal cost of labour



The Marginal Revenue Product is ?


aUpward sloping due to the law of demand


bUpward sloping due to the law of marginal utility


cDownward sloping due to the law of diminishing returns


dDownward sloping due to the law of supply



A fall in demand for labour is likely to lead to ?


a A lower equilibrium wage and lower quantity of labour


b A lower equilibrium wage and higher quantity of labour


cA higher equilibrium wage and higher quantity of labour


d A higher equilibrium wage and lower quantity of labour



An increase in the wage rate ?


aWill usually lead to more people employed


bWill decrease total earning if the demand for labour is wage elastic


cis illegal in a free market


dwill cause a shift in the demand for labour



Real business cycle theories suggest that _____ to correct departures from the desired growth path?


aThere is a role for fiscal policy


b There is a role for monetary policy


c There is a role for supply-side policy


dThere is a role for stabilizing output ever the business cycle



The impossibility of negative gross investment provides a ______ to fluctuation in ______?


aceiling, stock building


bceiling, capital prices


cfloor, output


dfloor, the capital-output ratio


View Answer floor, output

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