Question 1

An increase in the value of a currency is likely to:

Accepted Answer

A)   Make exports abroad cheaper in the foreign currency
B)   Make imports abroad more expensive in the foreign currency
C)   Reduce export sales
D)   Reduce imports C

Question 2

A high interest rate is likely to discourage borrowing.

Accepted Answer

A) True 
 B)False  True

Question 3

Inflation is measured with a weighted index.

Accepted Answer

A) True 
 B)False  True

Question 4

If demand is income elastic it means:

Accepted Answer

A)   the percentage change in quantity demanded is less than the percentage change in income
B)   the percentage change in quantity demanded is equal to the percentage change in income
C)   the percentage change in quantity demanded is more than the percentage change in income
D)   the percentage change in income is less than the percentage change in price

Question 5

An increase in the value of a currency may be caused by:

Accepted Answer

A)   An increase in supply of the currency
B)   An decrease in demand of the currency
C)   An increase in demand of the currency
D)   The government selling its currency

Question 6

A low interest rate is likely to reduce aggregate demand.

Accepted Answer

A) True 
 B)False

Question 7

If inflation was 3% and the following year is 2%, prices have fallen

Accepted Answer

A) True 
 B)False

Question 8

Gearing measures the profitability of a business:

Accepted Answer

A) True 
 B)False

Question 9

GDP measures:

Accepted Answer

A)   inflation
B)   The cost of living
C)   The standard of living
D)   National income

Question 10

GDP per person measures:

Accepted Answer

A)   inflation
B)   The cost of living
C)   The standard of living
D)   National income

Question 11

Anyone without a job is part of the unemployment rate in the UK

Accepted Answer

A) True 
 B)False

Question 12

CPI measures:

Accepted Answer

A)   inflation
B)   The cost of living
C)   The standard of living
D)   National income

Exam 11: Analysing the Macroeconomic Environment

An increase in the value of a currency is likely to:

A high interest rate is likely to discourage borrowing.

Inflation is measured with a weighted index.

If demand is income elastic it means:

An increase in the value of a currency may be caused by:

A low interest rate is likely to reduce aggregate demand.

If inflation was 3% and the following year is 2%, prices have fallen

Gearing measures the profitability of a business:

GDP measures:

GDP per person measures:

Anyone without a job is part of the unemployment rate in the UK

CPI measures: