Economics MCQs

Page No. 235

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


a Increase interest rates

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bEncourage savings

✓


c Cut taxes

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dReduce government spending

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View Answer Encourage savings

The natural rate of unemployment is likely to fall if ?


a unemployment benefits increase

✓


bIncome tax increases

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cMore training is available for the unemployed

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dGeographical immobility increases

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


aFrictional unemployment

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bSeasonal unemployment

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cCyclical unemployment

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dStructural unemployment

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View Answer Seasonal unemployment

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


aOccupational immobility

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bCyclical unemployment

✓


c Structural immobility

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d Geographical immobility

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View Answer Cyclical unemployment

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


aMarginal revenue = marginal product

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b Marginal cost = marginal product

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cMarginal revenue product = average cost of labour

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dMarginal revenue product = marginal cost of labour

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The Marginal Revenue Product is ?


aUpward sloping due to the law of demand

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bUpward sloping due to the law of marginal utility

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cDownward sloping due to the law of diminishing returns

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dDownward sloping due to the law of supply

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


a A lower equilibrium wage and lower quantity of labour

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b A lower equilibrium wage and higher quantity of labour

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cA higher equilibrium wage and higher quantity of labour

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d A higher equilibrium wage and lower quantity of labour

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An increase in the wage rate ?


aWill usually lead to more people employed

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

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cis illegal in a free market

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dwill cause a shift in the demand for labour

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


aThere is a role for fiscal policy

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b There is a role for monetary policy

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c There is a role for supply-side policy

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dThere is a role for stabilizing output ever the business cycle

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


aceiling, stock building

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bceiling, capital prices

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cfloor, output

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dfloor, the capital-output ratio

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View Answer floor, output

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