UFS Economics Review

Which of the following is not a likely effect of inflation?

• a rise in export

• upward pressure on nominal interest rates

• a rise in imports

• downward pressure on the exchange rate of the $A

Use the information provided, and you are also told that 50% of the tyre production is used in new cars produced in 2018. GDP in 2018 for this economy is equal to

• $175 million

• $180 million

• $200 million

• $205 million

One reason for the downward slope of the Aggregate Demand curve is

• at full employment, a rise in demand does not produce a rise in output

• a fall in the Australian price level makes Australian-produced goods more internationally competitive and imports rise

• a rise in the price level reduces the real value of income, leading to a fall in consumption expenditure

• a fall in the price level increases interest rates making exports less competitive

A suitable Central Bank response to high GDP growth, full employment and rising inflation would be to

• ease Monetary Policy by buying government securities

• tighten Monetary Policy by selling government securities

• ease Monetary Policy by selling government securities

• tighten Monetary Policy by buying government securities

Which of the following statements is correct?

• Real GDP per capita is highest in Year 1

• Real GDP per capita is highest in Year 3

• the real economic growth rate is highest between Year 2 and Year 3

• inflation is lowest in Year 4

You receive $200 interest after saving $5000 for a year. The inflation rate for the year is 3%. Which of the following statements is correct?

• the real rate of interest is 1%

• the real rate of interest is 4%

• the nominal rate of interest is 7%

• the real rate of interest if 7%

Which is the best explanation of structural unemployment?

• the sum of cyclical and frictional unemployment

• short term unemployment associated with workers searching for the right job

• unemployment that arises due to a lack of appropriate skills

• unemployment due to a downturn in the business cycle

Which of the following statements is correct?

• the participation rate is 62.5% and the unemployment rate is 12.5%

• the participation rate is 75% and the unemployment rate is 12.5%

• the participation rate is 75% and the unemployment rate is 16.7%

• the participation rate is 62.5% and the unemployment rate is 8.3%

Which of the following statements is correct?

• Country A has an absolute advantage in producing TV

• Country B has an absolute advantage in producing CD players

• Country A has a comparative advantage in producing CD players

• Country B has a comparative advantage in producing CD players

Which of the following is likely to cause the value of one Australian Dollar changing from US 75 cents to US 70 cents

• Australia's inflation rate decreased

• More American tourist traveled to Australia

• Australia increased the interest rate

• American goods are more popular to Australian than before