Short Answer Economic Questions

1. What is the formula for AD
2. Which is the largest component of AD
3. If there is an increase in imports what happens to AD?
4. What is the nominal GDP
5. If there is an increase in the rate of income tax what is the effect on AD
6. Define productivity
7. What is the savings ratio?
8. What is gross fixed capital investment
9. If there is an increase in wages what will be the effect on SRAS and AD
10. To increase the value of the exchange rate what needs to happen to interest rates?
11. If there is a depreciation in the exchange rate what will happen to the quantity of exports?
12. Does a devaluation of the exchange rate always improve the current account?
13. What does the RPI measure?
14. What is the difference between the claimant count and the ILO calculation of unemployment
15. If people are in between jobs what kind of unemployment is occurring?
16. IF a coal mine closed down what kind of unemployment is likely to occur?
17. What kind of unemployment would be reduced if the MPC cut interest rates
18. What is the MPC target for inflation?
19. If inflation in the UK is higher than other countries what will happen to the exchange rate in the UK?
20. What is a tight monetary policy
21. What is loose fiscal policy
22. If there is an appreciation in the exchange rate what will happen to AD?
23. If there is an increase exports what will happen to the govt deficit?
24. If there is an increase in Tax rates what will happen to the current account deficit?
25. What is the long run trend rate of economic growth.
26. If the LRAS is inelastic what will be the effect on inflation and output of an increase in welfare payments?
27. What is the Phillips curve
28. What are the 6 main macroeconomic objectives of the govt
29. If there is a tightening of the labour market what will be the effect on inflation
30. What is the difference between interventionist supply side policies and deregulation
31. If the govt reduces the PSNCR what will be the effect on AD
32. What is a recession
33. What are demand side policies?
34.

1. Give 5 costs of inflation
2. Give 5 costs of unemployment
3. State 3 costs of devaluation
4. State 3 potential costs of economic growth
5. State 5 supply side policies the govt can use to increase competitiveness
6. State 5 problems of supply side policies the govt may introduce
7. State 4 problems of using Monetary policy to reduce inflation.
8. State 3 ways to reduce a current account deficit
9. State 3 difficulties the govt will face in reducing the current account deficit.
10. State 3 ways that the govt could increase the long run trend rate of economic growth.
11. What else could cause an increase in the long run trend rate of economic growth
12. Why does economic growth effect the current account
13. State 6 economic effects of an increase in interest rates
14. What factors are necessary for a successful economy?
15. Under what conditions will lower taxation rates reduce unemployment
16. What are the economic effects of an increase in investment in the economy?
17. Give 3 benefits of a stable exchange rate.
18. State 4 factors that could cause an increase in consumer spending.
19. How does the govt measure RPI?
20. The MPC sets interest rates to effect inflation what statistics will they consider and why.

By on February 8th, 2007