The short-run Phillips curve illustrates a possible trade-off between
economic growth and income inequality
inflation and unemployment
economic growth and protection of the environment
inflation and income inequality
Which one of the following is a likely result of an increase in the rate of economic growth?
An increase in unemployment
A decrease in investment
An increase in living standards
A decrease in tax revenues
Which of the following is most likely to be associated with a negative output gap?
High unemployement
High business confidence
An increase in house prices
An increase in wellbeing
The chart shows a government budget. What can be deduced from this chart?
There was a budget surplus in quarter 3 2015
There was a budget deficit in quarter 3 2013
Tax receipts exceeded government expenditure in quarter 1 2017
Government expenditure exceeded tax recipts in quarter 3 2015
Which of the following is most likely to be a benefit of economic growth?
Environmental damage
Improved public services
A negative output gap
A decrease in tax revenues
Which one of the following is an interventionist supply-side policy?
Deregulation of the labour market
Privatisation
A reduction in interest rates
Regional policy
Which one of the following is associated with a falling unemployment rate?
A fall in the negative output gap
A rise in the level of welfare payments
A fall in demand for exports
A rise in economic inactivity
Which one of the following diagrams illustrates an economy experiencing potential economic growth?
A
B
C
D
The diagram shows an economy's actual growth rate and trend growth rate. Which one of the following can be deduced from the diagram?
The economy is in recovery between points U and V
A positive output gap exists at point V
Unemployment is rising between points W and X
A positive output gap exists at point X
In June 2020 the Bank of England increased the value of its asset purchases scheme (quantitative easing). Which of the following describes this economic policy?
Reflationary monetary policy
Deflationary monetary policy
Reflationary fiscal policy
Deflationary fiscal policy
The long-term trend rate of economic growth for this economy is 2.7%. Which one of the following can be deduced from the table?
The positive output gap increased between 2017 and 2018
There was a negative output gap in 2018 and 2019
There was a positive output gap in 2018 and 2019
the negative output gap decreased between 2018 and 2019
The short-run Phillips curve shows the relationship between which of the following?
The rate of economic growth and protection of the enfironment
The rate of inflation and the unemployment rate
The rate of inflation and equilibrium on the current account of the balance of payments
The rate of economic growth and income inequality
Besides inflation targeting, which one is also a role of the central bank?
Increasing the trade deficit
Acting as the lender of last resort
Achieving national happiness
Reducing income equality
Tax revenue is €789 bn and government spending is €945 bn. Which one of the following policies could a government implement to achieve a balanced budget?
Deflationary monetary policy
Reflationary monetary policy
Deflationary fiscal policy
Reflationary fiscal policy
Which one of the following illustrates the conflict between the macroeconomic objectives of a low rate of inflation and a low rate of unemployment?
A long-run classical AS curve
An AD curve
A short-run Phillips curve
A SRAS curve
Which one of the following is the most likely impact of an increase in asset purchases (quantitative easing)?
A decrease in the availability of credit
A decrease in the rate of inflation
An increase in the rate of unemployment
An increase in the money supply
In 2021 India experienced an 8% increase in real GDP. Which one of the following is most likely to be a cost of economic growth?
A decrease in profits for firms
An increase in damage to the environment
A decrease in government tax revenues
An increase in the level of investment
The chart shows Ireland's real GDP per capita. Which one of the following is the most likely effect of this change in real GDP per capita?
An increase in the standard of living
An increase in the rate of unemployment
A decrease in consumer confidence
A decrease in the purchasing power of consumers
Ceteris paribus, which one of the following is the most likely impact of an increase in the base rate of interest?
An increase in the rate of economic growth
An increase in the rate of unemployment
A decrease in the cost of borrowing
A decrease in the reward for saving
In December 2021 the ECB decided to end its asset purchases (quantitative easing) scheme. Which one of the following describes this economic policy?
Reflationary fiscal policy
Deflationary fiscal policy
Reflationary monetary policy
Deflationary monetary policy
Which one of the following is a free market supply-side policy?
Investment in education and training
Priovatisation of state-owned industries
Investment in infrastructure projects
Providing finance for business start-ups
The diagram shows a country's trend growth rate and its actual growth rate. Which of the following can be deduced from the diagram?
The rate of economic growth is increasing between points A and B
There is a negative output gap at point B
There is a positive outputu gap at point C
The level of unemployment is increasing between points C and D
The Bank of Israel is the country's central bank and it is the sole banker to Israel's Government. Which one of the following is also a role of a central bank?
To act as a lender of last resort
To achieve a balanced government budget
To change the level of welfare payments
To deregulate product and labour markets
In 2022 Kuwait experienced an increase in real GDP of 8.7%. Which one of the following is most likely to be a benefit of actual economic growth?
A decrease in profits fro firms
A decrease in the rate of inflation
A decrease in the rate of unemployment
A decrease in government tax revenues
Governments use fiscal policies to meet their macroeconomic objectives. Which one of the following is a fiscal policy instrument?
Changes in quantitative easing
Changing in taxation
Changes in lending criteria
Changes in liquidity requirements
Which one of the following is most likely associated with a negative output gap?
An increase in house prices
An increase in the rate of inflation
An increase in business confidence
An increase in unemployment
In 2022 the Government of Brazil introduced measures to cut the costs of bureaucracy for firms. This policy is an example of which one of the following?
Free market supply-side policy
Interventionist supply-side policy
Reflationary fiscal policy
Deflationary fiscal policy
The diagram shows a country's trend growth rate and its actual growth rate. Which one is most likely to be associated with a movement from Y to Z?
A decrease in government tax revenue
An increase in profits for firms
An increase in the rate of unemployment
A decrease in business confidence
In 2023 the ECB decided to end its quantitative easing programme. Ceteris paribus, which one of the following is the most likely effect of this decision?
An increase in the rate of corporation tax
A decrease in the rate of unemployment
An increase in the rate of economic growth
A decrease in the rate of inflation
Which one of the following is the most likely to occur when an economy is in a recession?
A rise in investment and a rise in the profits of firms
A fall in government expenditure and a rise in real income
A rise in consumer confidence and a fall in the unemployment rate
A fall ingovernment tax revenues and a fall in real output
The Moroccan economy had a large negative output gap in 2017. Which one of the following is usually associated with a negative output gap?
Demand-pull inflation and decreasing unemploymentq
Cost-push inflation and high employment rates
Real GDP growth less than the long-term productive potential
Real GDP growth more than the long-term productive potential