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Fundamentals of Business Economics

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Total Questions : 468

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Question # 61

Select the best definition of a regressive tax from the options below:

Options:

A.  

A tax which rises proportionately with income

B.  

A tax which rises more than proportionately with income

C.  

A tax which rises less than proportionately with income

D.  

A tax on expenditure

Discussion 0
Question # 62

Which global institution is concerned with co-coordinating economic policies and agreeing banking and financial regulations?

Options:

A.  

The IMF

B.  

The World Bank

C.  

The World Trade Organization

D.  

The G20

Discussion 0
Question # 63

All the following statements relate to an increase in government spending which is not accompanied by an increase in taxation. Which statement is NOT correct?

Options:

A.  

The government's budget deficit will increase

B.  

The aggregate demand curve will shift to the right

C.  

The initial change in government spending may lead to a larger impact upon the economy

D.  

An expansionary monetary policy is being pursued

Discussion 0
Question # 64

Which of the following statements about macroeconomic policy objectives is correct?

Options:

A.  

Governments always regard control of inflation as the most important policy objective

B.  

Conflicts between objectives mean that macroeconomic policy can never be regarded as successful

C.  

Expanding demand to reduce unemployment may mean that the balance of payments worsens

D.  

The pursuit of economic growth inevitably increases unemployment

Discussion 0
Question # 65

In the aggregate supply and demand model, a significant rise in the cost of energy for industry would lead to the

Options:

A.  

Aggregate supply curve moving to the right

B.  

Aggregate supply curve moving to the left

C.  

Aggregate demand curve moving to the right

D.  

Aggregate demand curve moving to the left

Discussion 0
Question # 66

The business sector will be affected by a contraction in the money supply because

Options:

A.  

Interest rates will tend to fall, thus reducing business costs.

B.  

Inflation will fall and thus demand in the economy will expand.

C.  

Consumer credit will contract thus reducing consumer demand.

D.  

The exchange rate will fall thus making business more internationally competitive.

Discussion 0
Question # 67

The level of national income in the circular flow will remain constant if

Options:

A.  

injections are greater than withdrawals

B.  

injections are equal to withdrawals

C.  

injections are equal to savings

D.  

injections plus withdrawals are equal to savings plus investment

Discussion 0
Question # 68

As the process of globalization increases, typical businesses will

Options:

A.  

Depend more and more on their domestic markets.

B.  

Have to raise more capital from internal sources.

C.  

Have less need to increase their international competitiveness.

D.  

Be more and more affected by changes in exchange rates.

Discussion 0
Question # 69

In a recession, the appropriate policy for a government seeking a recovery in the economy would be to:

Options:

A.  

cut public expenditure, reduce taxes, and lower interest rates

B.  

raise public expenditure, reduce taxes and lower interest rates

C.  

raise public expenditure, raise taxes and lower interest rates

D.  

cut public expenditure, raise taxes and raise interest rates

Discussion 0
Question # 70

A country has a trade deficit. The demand for its imports and exports are both price elastic. All of the following would lead to an a reduction in the country's trade deficit except which one?

Options:

A.  

A fall in consumer incomes in the country.

B.  

An improvement in the country's terms of trade.

C.  

A depreciation in the exchange rate for the country's currency.

D.  

A rise in the rate of inflation in its trading partners' economies.

Discussion 0
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