ECO403 Quiz

Question # 1 of 10 ( Start time: 11:20:47 PM ) Total Marks: 1
Which of the following events is NOT expected to decrease aggregate demand?
Select correct option:



A decrease in government purchases

An increase in real interest rates

A decrease in foreign incomes

A decrease in the price level


Question # 2 of 10 ( Start time: 11:22:15 PM ) Total Marks: 1
In a small open economy with a floating exchange rate, fiscal policy will be ineffective because:
Select correct option:


Monetary policy will completely offset it.

The exchange rate will remain constant.

A fall in net exports will offset any increases in government purchases or consumption.

The exchange rate will rise by the same amount as the interest rate.


The cost of capital is determined by all of the following EXCEPT the:
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Rate of depreciation.

Corporate profit rate.

Interest rate.

Price of capital and its rate of change.


Question # 4 of 10 ( Start time: 11:25:08 PM ) Total Marks: 1
Which of the following best defines Net national product?
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GDP less depreciation

GNP plus income generated from foreign firms in the domestic country

GNP less depreciation

GNP less income generated from foreign firms in the domestic country

Question # 5 of 10 ( Start time: 11:26:26 PM ) Total Marks: 1
The deviation of the actual rate of unemployment from the natural rate is known as:
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Cyclical unemployment.

Structural unemployment.

Frictional unemployment.

Seasonal unemployment.

Question # 6 of 10 ( Start time: 11:27:59 PM ) Total Marks: 1
An increase in government purchases will shift the:
Select correct option:


IS curve to the left and decrease both the interest rate and the level of income.

IS curve to the right and increase both the interest rate and the level of income.

IS curve to the right and increase the level of income but decrease the interest rate.

LM curve downward (to the right) and increase the level of income but decrease the interest rate.


Question # 7 of 10 ( Start time: 11:31:49 PM ) Total Marks: 1
In monopolistic competition, firms set their own prices. This is an example of:
Select correct option:


The sticky-wage model.

The imperfect information model.

The sticky-price model.

IS-LM model.




Question # 8 of 10 ( Start time: 11:33:19 PM ) Total Marks: 1
If a consumer wishes to consume more than his current income in Period 1:
Select correct option:


He will be unable to consume anything in Period 2.

The real interest rate must be greater than one.

The decision to consume more must satisfy both his budget constraint and his borrowing constraint.

None of the given options.

Question # 9 of 10 ( Start time: 11:33:55 PM ) Total Marks: 1
If labor productivity per week is 200 units and there are 5 employees what is the total output?
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40 units.

95 units.

1000 units.

200 units.


Question # 10 of 10 ( Start time: 11:34:37 PM ) Total Marks: 1
Which one of the following is most likely to cause firms to decrease the amount of investment they undertake?
Select correct option:


A rise in expected consumer demand.

A fall in business confidence.

A fall in company taxation.

A fall in interest rates.

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