Q1 · Practice questionSimple familiar1 mark
QUESTION 1
A hypothetical cash rate falls from 4.35% to 3.85%. The decrease is
(A)
0.5 basis points.
(B)
50 percentage points.
(C)
50 basis points.
(D)
11.5 percentage points.
Q2 · Practice questionSimple familiar1 mark
QUESTION 2
A worker receives a 4% increase in nominal wages while consumer prices rise by 6%. Their purchasing power
(A)
rises by 2%.
(B)
falls by approximately 1.89%.
(C)
falls by 6%.
(D)
rises by approximately 1.89%.
Q3 · Practice questionSimple familiar1 mark
QUESTION 3
A household has disposable income of $1000 and consumption of $850. When income rises to $1100, consumption rises to $920. Its initial APC and its MPC are, respectively,
(A)
0.70 and 0.85.
(B)
0.85 and 0.70.
(C)
0.85 and 0.85.
(D)
0.15 and 0.30.
Q4 · Practice questionSimple familiar1 mark
QUESTION 4
Which change directly increases aggregate demand, all else equal?
(A)
An increase in household saving with unchanged income.
(B)
A fall in exports.
(C)
An increase in purchases of imported goods with unchanged total spending.
(D)
An increase in government purchases of locally produced hospital equipment.
Q5 · Practice questionSimple familiar1 mark
QUESTION 5
In a simple closed economy with no taxation, the marginal propensity to save is 0.20. The simple Keynesian multiplier is
(A)
5.
(B)
0.20.
(C)
0.80.
(D)
4.
Q6 · Practice questionSimple familiar1 mark
QUESTION 6
In a five-sector circular-flow model, total injections are $260 billion and total leakages are $290 billion. If these flows persist initially, the model predicts
(A)
upward pressure on national income.
(B)
downward pressure on national income.
(C)
no pressure on national income.
(D)
a guaranteed increase in the price level.
Q7 · Practice questionSimple familiar1 mark
QUESTION 7
Annual inflation falls from 5% to 2%, and the CPI continues to rise. This is
(A)
deflation.
(B)
disinflation.
(C)
a fall in all individual prices.
(D)
a 3% fall in the price level.
Q8 · Practice questionSimple familiar1 mark
QUESTION 8
A café employee works 12 hours each week, wants more hours and is available to work them. This worker is
(A)
frictionally unemployed.
(B)
underemployed.
(C)
outside the labour force.
(D)
necessarily structurally unemployed.