BE Mock Test Answers PDF

**\ The demand curve for a product will shift to the right when there is:** **Answer** Question 1 - Correct Answer1 A. A fall in the price of a complementary good B. A reduction in indirect tax on the good C. An improvement in production which lowers costs D. A fall in the price of the goo...

**\ The demand curve for a product will shift to the right when there is:** **Answer** Question 1 - Correct Answer1 A. A fall in the price of a complementary good B. A reduction in indirect tax on the good C. An improvement in production which lowers costs D. A fall in the price of the good +-----------------------------------+-----------------------------------+ | **Question** | **Which of the following may | | | cause and increase in National | | | Income?** | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | A rise in exports | | | | | | B. | | | | | | A fall in investment | | | | | | C. | | | | | | An increase in saving | | | | | | D. | | | | | | A fall in consumer spending | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **In all economies, the | | | fundamental economic problem is | | | that:** | | +===================================+===================================+ | **Answer** | Question 3 - Correct Answer1 | | | | | | A. | | | | | | Resources are scarce relative to | | | human wants | | | | | | B. | | | | | | Consumers never have as much | | | money as they would wish | | | | | | C. | | | | | | There is always some unemployment | | | of resources | | | | | | D. | | | | | | The supply of resources is always | | | less than the demand for them | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **In a free market economy, the | | | allocation of resources between | | | different productive activities | | | is determined mainly by the:** | | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | Pattern of consumer expenditure | | | and firm\'s production activities | | | | | | B. | | | | | | Decisions of the government | | | | | | C. | | | | | | Wealth of entrepreneurs | | | | | | D. | | | | | | Supply of factors of production | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | Which one of the following is not | | | a normal feature of the recovery | | | phase of the trade cycle?** | | +===================================+===================================+ | **Answer** | Question 5 - Correct Answer1 | | | | | | A. | | | | | | Increasing government borrowing | | | | | | B. | | | | | | Falling unemployment | | | | | | C. | | | | | | Rising levels of imports | | | | | | D. | | | | | | Rising national income | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | The demand for housing can be | | | affected by all of the following, | | | except** | | +===================================+===================================+ | **Answer** | A. | | | | | | The house prices in neighbourhood | | | surrounding | | | | | | B. | | | | | | A 2% increase in the interest | | | rate by the central bank | | | | | | C. | | | | | | The rate of crime in the housing | | | community | | | | | |  | | | | | | D. | | | | | | An increase in the cost of | | | building materials | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **The price of a tomato increases | | | and people buy fewer onions. You | | | infer that onions and tomatoes | | | are:** | | +===================================+===================================+ | **Answer** | Question 7 - Correct Answer1 | | | | | | A. | | | | | | Complements | | | | | | B. | | | | | | Normal goods | | | | | | C. | | | | | | Substitutes | | | | | | D. | | | | | | Inferior goods | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | If the price of a video rental is | | | below the equilibrium price, the | | | quantity supplied is | | | \_\_\_\_\_\_\_ than the quantity | | | demanded. If the price of video | | | rentals is above the equilibrium | | | price, the quantity supplied is | | | \_\_\_\_\_\_\_ than the quantity | | | demanded.** | | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | Less; greater | | | | | | B. | | | | | | Greater; greater | | | | | | C. | | | | | | Greater; less | | | | | | D. | | | | | | Less; less | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | Demand-pull inflation is an | | | inflation that results from an | | | initial \_\_\_\_\_.** | | +===================================+===================================+ | **Answer** | Question 9 - Correct Answer1 | | | | | | A. | | | | | | Increase in aggregate demand | | | | | | B. | | | | | | Increase in natural resource | | | prices | | | | | | C. | | | | | | Increase in wage rates | | | | | | D. | | | | | | Decrease in aggregate demand | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **Question** | **Select the correct implication | | | of an imperfect market** | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | Product Differential | | | | | | B. | | | | | | Fair and competitive price | | | | | | C. | | | | | | Low bargaining power | | | | | | D. | | | | | | Inabaility to make independent | | | pricing  | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | A perfect competitive market has | | | a distinct \_\_\_\_ demand curve | | +===================================+===================================+ | **Answer** | A. | | | | | | Downward Sloping  | | | | | | B. | | | | | | vertical  | | | | | | C. | | | | | | Kinked | | | | | | Question 11 - Correct Answer4 | | | | | | D. | | | | | | Horizontal  | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | Cost-push inflation is an | | | inflation that results from an | | | initial \_\_\_\_.** | | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | Increase in money wages or money | | | prices of raw materials | | | | | | B. | | | | | | Increase in taxes | | | | | | C. | | | | | | Decrease in taxes | | | | | | D. | | | | | | Increase in investment | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | The recession phase of the trade | | | cycle:** | | +===================================+===================================+ | **Answer** | Question 13 - Correct Answer1 | | | | | | A. | | | | | | Is usually caused by falling | | | aggregate monetary demand | | | | | | B. | | | | | | Is often caused by excessive | | | consumer expenditure | | | | | | C. | | | | | | Is normally characterised by | | | accelerating inflation | | | | | | D. | | | | | | Is most prolonged when the | | | country has high levels of | | | imports | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | Which of the following is | | | not an effect of low real | | | interest?** | | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | Nominal costs of borrowing will | | | always be low | | | | | | B. | | | | | | Credit-based sales will tend to | | | be high | | | | | | C. | | | | | | Business activity will tend to | | | increase | | | | | | D. | | | | | | Investment will be encouraged | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **In the circular flow model of | | | the economy, the level of | | | national income will always reach | | | equilibrium because:** | | +===================================+===================================+ | **Answer** | Question 15 - Correct Answer1 | | | | | | A. | | | | | | Withdrawals are a function of the | | | level of income | | | | | | B. | | | | | | Injections and withdrawals are | | | always equal | | | | | | C. | | | | | | Governments will changes taxes | | | and expenditure to ensure | | | equilibrium | | | | | | D. | | | | | | Expenditure equals income | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | Which of the following government | | | policies would not tend to raise | | | national income over time?** | | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | Financial incentives to encourage | | | personal and corporate saving | | | | | | B. | | | | | | Increased expenditure on the | | | economic infrastructure | | | | | | C. | | | | | | Tax cuts to encourage higher | | | demand from consumers | | | | | | D. | | | | | | Policies to encourage the | | | training of labour | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | Which one of  the following is | | | not a disadvantage of | | | inflation?** | | +===================================+===================================+ | **Answer** | Question 17 - Correct Answer1 | | | | | | A. | | | | | | It redistributes wealth from | | | debtors to creditors | | | | | | B. | | | | | | It reduces international | | | competitiveness | | | | | | C. | | | | | | Market price signals are | | | distorted | | | | | | D. | | | | | | Fixed income earners experience a | | | fall in real income | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | If the demand curves for Good A | | | shifts to the left when the price | | | of Good B rises, we may conclude | | | that:** | | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | The goods are complements | | | | | | B. | | | | | | The goods are substitutes | | | | | | C. | | | | | | Good A is an inferior good | | | | | | D. | | | | | | The demand for Good A is price | | | elastic | +-----------------------------------+-----------------------------------+ **Multiple Choice: Q19: Which one of the following would lead\...** Click for more options Points:[**5**](https://online.uwl.ac.uk/webapps/assessment/do/content/assessment?action=MODIFY&course_id=_203050_1&content_id=_9069025_1&assessmentType=Test&method=modifyAssessment) +-----------------------------------+-----------------------------------+ | **Question** | **Which one of the following | | | would lead the demand curve for a | | | good to shift to the right?** | +===================================+===================================+ | **Answer** |  | | | | | | A. | | | | | | A rise in consumer income where | | | the good is a normal good | | | | | | B. | | | | | | A decrease in the supply of a | | | complementary good | | | | | | C. | | | | | | An increase in the supply of a | | | substitute good | | | | | | D. | | | | | | A fall in the price of the good | +-----------------------------------+-----------------------------------+ +-----------------------------------+-----------------------------------+ | **\ | | | If the government imposed a price | | | for a good that was above the | | | equilibrium price, the | | | consequence would be:** | | +===================================+===================================+ | **Answer** | Question 20 - Correct Answer1 | | | | | | A. | | | | | | A contraction in demand, an | | | extension in supply and a market | | | surplus | | | | | | B. | | | | | | A contraction of demand, an | | | increase in supply and a market | | | surplus | | | | | | C. | | | | | | A decrease in demand, an | | | extension of supply and a market | | | surplus | | | | | | D. | | | | | | A rise in supply, a fall in | | | demand and a market shortage | +-----------------------------------+-----------------------------------+ **The demand curve for a product will shift to the right when there is:** **Which of the following may cause and increase in National Income?** **Which one of the following is not a normal feature of the recovery phase of the trade cycle?**