Multiple choice stuck on Watch

Happy Kid
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#1
Report Thread starter 9 years ago
#1
I dont understand any of these awnsers can someone explain them please.


In the short term, contractionary fiscal policy is most likely to cause

A a deterioration in the current account on the balance of payments.
B a rise in unemployment.
C a fall in export volumes.
D an increase in the rate of inflation

Awnser = D


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Aggregate demand may fall as a result of a decrease in

A the government’s budget deficit.
B the government’s budget surplus.
C savings relative to investment.
D imports.

Awnser = A
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In 2007, an economy’s nominal national income grew by 8%, the price level rose by 5% and the population grew by 1%. From this information, it can be concluded that real national income per head grew by

A exactly 3%.
B more than 3%.
C less than 3%.
D 4%.

Awnser = C

How do u work it out?

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A country experiences both unemployment and persistent surpluses in the balance of payments. Which one of the following is most likely both to increase employment and to reduce a balance of payments surplus?

A Increasing interest rates
B Increasing government expenditure
C Increasing the government’s budget surplus
D Revaluing the currency

Awnsr = B

15 All other things being equal, in the short run which one of the following is most likely to lead to a rise in national income?
A A rise in interest rates and a rise in the exchange rate
B A fall in interest rates and a fall in the exchange rate
C A rise in interest rates and a fall in the exchange rate
D A fall in interest rates and a rise in the exchange rate


Awnser = B
I thought that a fall in the exchange rate wold mean they earn less money?
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All other things being equal, lower inflation in an economy is most likely to be achieved if there is an increase in
A productivity.
B exports.
C consumption.
D welfare benefits.

= A

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Which one of the following is most likely to increase the level of investment in a particular economy? An increase in
A the value of a country’s currency on the foreign exchange market
B aggregate demand in the economy
C the level of unemployment
D the spare capacity of the economy

=B

I thought it would A because i thought foriengn investors wanted to invest in our economy when we have a strong currency.
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On 22 September 2004, it was reported that, despite an ‘oil crisis’ which had seen a 40% increase in oil prices since January 2004, the world’s wealthiest 30 countries were still on course to grow by about 3.5% over the year. The oil crisis had only had a very limited effect on inflation. Based on this information, which one of the following is most likely to be correct? For these
30 countries, the 2004 ‘oil crisis’ caused

A inflation due to growth in productive capacity.
B both negative economic growth and inflation.
C inflation due to excess aggregate demand.
D inflation due to a rise in costs.


= D

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Question 5
http://store.aqa.org.uk/qual/gceasa/...W-QP-JAN08.PDF

=A
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All other things being equal, an increase in aggregate demand would result from an increase in
A the deficit in the current account of the balance of payments.
B the household savings ratio.
C the government budget surplus.
D the ration of household consumption to national income


=D
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Which one of the following would be classified as fiscal policy? A UK government decision to
A increase the budget deficit
B decrease the exchange rate against the euro
C reduce the growth of the money supply
D raise interest rates


=A
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13 The consequence of increasing the interest rate when the exchange rate is rising is likely to be an increase in

A the level of unemployment.
B aggregate supply.
C the current account surplus.
D aggregate demand.

=A
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Question 15 http://store.aqa.org.uk/qual/gceasa/...W-QP-JAN08.PDF

= C



D the ratio of household consumption to national income.
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Tallon
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#2
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for 1. I would have put B
2. A is correct. Less gov spending so yeah AD would fall.
3. It's C, less than 3% because it's 8% increase minus 5% because of inflation. so 3%, but you're dividing by a bigger population so it's elss than 3%
4. B because that'll shift mr AD to the right.
5. B because falling interest rates means more investment and jobs, and falling exchange rate means more exports which are injections into the circular flow.
6. A. The others increase inflation. more productivity means more goods and ****, so more supply so less prices
7. B because more AD means firms wanna buy more machinary and **** to produce more goods for them.
8. D. well, none of the others are true. D becuase, well, the costs are up I suppose.
9. at first it seems to rise by 50%, but the price level is also rising so there's inflation. so real gdp is less. so A
10. D because more spending and less savings means more AD
11. A because.. I don't know.. that's gov spending which is a fiscal policy. Not much else to say on that one really.
12. A because there'd be less investment if there's a nasty interest rate, and more expensive for firms and stuff, so job losses.
13. AD is shifitng right which is cuased by an expansionary monetary policy.


anything you didnt understand feel free to ask. Sorry about my chavvy way of explaining things with "costs more to ivnest and ****" explainations lol. the only answer I don't understand is question 1. Are you sure it';s not D but actually B? Or was the question actually something like, "why would you need to use a fiscal policy?" because no way can it be D.
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LiveLife
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You've got the answer wrong for Q1, it's not D, its B, I have the paper
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Tallon
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(Original post by LiveLife)
You've got the answer wrong for Q1, it's not D, its B, I have the paper

thought so. thanks for clearing that up. what paper was it on btw?
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LiveLife
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(Original post by Tallon)
thought so. thanks for clearing that up. what paper was it on btw?
AQA June 2008 - Unit 2, "The National Economy"

Oh, and I thought your way of explaining the q's was quite good actually
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