10 Questions
Which of the following could influence liquidity preference
a + b are correct
You are a member of the Treasury, and you are concerned that the inflation rate is too high. Which of the following policies should you recommend?
A decrease in the money supply
Which of the following instruments is not used by the Bank of England to change the money supply?
The tax system
If the economy was booming, we would expect
Government expenditure to be low and tax revenues to be high so that the public sector might be running a surplus
Which of the following is not an automatic stabiliser?
Government expenditure on road building programmes
If central government's spending exceeded its tax receipt in 2022, the country would have a:
Budget deficit
Discretionary fiscal policies refer to:
Deliberate change in tax rates or the level of government expenditure in order to influence the level of aggregate demand.
Which of the following determines the competitive advantage of a nation?
All of the above
A higher domestic price level will result in
Higher imports.
The UK and Tanzania have the option to produce wheat or rice but not both. Suppose that the UK can produce 60 units of Wheat, or 20 units of rice and Tanzania can produce 30 units of wheat or 60 units of rice. This means that
Tanzania has a comparative advantage over UK in the production of rice
Test your understanding of economics by identifying the factors that can influence liquidity preference. This concept is crucial in understanding the behavior of individuals and institutions in the economy. See how well you can distinguish between the various factors that impact liquidity preference.
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