The precautionary demand for money is ?

A. An idle because
B. An active balance
C. Directly related to interest rates
D. Inversely related to income

An increase in interest rates ?

A. Is likely to reduce savings
B. Is likely to reduce the external value of the currency
C. Leads to a shift in the mec schedule
D. Leads to a movement along the mec schedule

Investment depends mainly on ?

A. Past levels of income
B. Future expected profits
C. Present national income levels
D. Historic data

Friedman’s theory of consumption focuses on ?

A. Past income
B. Current income
C. Disposable income
D. Permanent income

An increase in investment is most likely to be caused by ?

A. Lower interest rates
B. Lower national income
C. A decrease in the marginal propensity to consume
D. An increase in withdrawals

If labour productivity per week is 200 units and there are 5 employees what is the total output ?

A. 40 units
B. 195 units
C. 1000 units
D. 200 units

Potential growth measures ?

A. The growth of the fastest economy in the world
B. The fastest growth an economy has ever achieved
C. The present rate of growth of an economy
D. The rate of growth that could be achieved if resources were fully employed

The socially optimal rate of growth is ?

A. Zero
B. Negative
C. Where the marginal social benefit = the marginal social cost
D. Total social costs are minimised

To anticipate what the economy is going to do next the government will look at ?

A. Lagging indicators
B. Flashing indicator
C. Coincidental indicators
D. Leading indicators

If the marginal propensity to consume on domestic products is 0.9 the size of the multiplier is ?

A. 10
B. 1
C. 9
D. 0.1