What does the trend in Australia's unemployment rate between mid 2020 and mid 2022 tell you about the business cycle?

The trend is decreasing- the Australian business cycle was expanding

What is the likely impact of an increase in interest rates on AD?

Decrease C and I and decrease AD

Average material living standards are likely to increase if

The rate of economic growth increases

Non material living standards may FALL as a result of which of the following

Fossil fuel consumption increases

Inflation (rising prices) occurs when

consumer confidence rises and aggregate demand increases

Investment in the circular flow of income can be defined as

the purchase of capital by business to increase production

A contraction or downturn in economic activity can be explained by

Leakages greater than injections

Aggregate demand can be defined as

Total expenditure on final Australian made goods & services

What is the likely impact on AD of an increase in the consumer confidence index from 99 to 110?

Increase private consumption spending and AD

Non material living standards can be measured using

A happiness of life satisfaction index

Which statement best describes the business cycle?

Changes in economic activity (real GDP) over time

Changing interest rates will affect the following components of aggregate demand

consumption and investment spending

A decrease in the exchange rate for the AUD means

The price of AUS exports in AUD decreases

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VCE Eco Economic growth and AD

25 termsStudBud Administration102 plays

Standard of living; Circular flow; AD

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Questions 25

Answers

1
What does the trend in Australia's unemployment rate between mid 2020 and mid 2022 tell you about the business cycle?
The trend is decreasing- the Australian business cycle was contracting
The trend is increasing- the Australian business cycle was expanding
The trend is decreasing- the Australian business cycle was expanding
The trend is decreasing- the Australian business cycle was contracting
2
Net exports represent
Exports only
Consumption (C) less exports
Exports less imports
total demand for the Australian dollar
3
What is the likely impact of an increase in interest rates on AD?
Increase I and increase AD
Decrease C and I and decrease AD
Increase C and I and increase AD
Increase C and decrease AD
4
For the provision of labour households receive from firms
dividends
wages and salaries
rent
profit
5
Average material living standards are likely to increase if
The unemployment rate rises
Literacy rates fall
The inflation rate increases
The rate of economic growth increases
6
Examples of private consumption (C) expenditure include
All of the above
Clothing and footwear purchased by consumers
Hairdressing and dry cleaning purchased by consumers
Expenditure on consumer durables by households
7
The following are leakages from the circular flow of income
Savings, Imports and Government spending
Savings, Taxes and Imports
Savings, Taxes and Investment
Exports, Investment and Taxes
8
Non material living standards may FALL as a result of which of the following
Productivity increases
Average incomes increase
Australia is able to sell more exports to China
Fossil fuel consumption increases
9
Inflation (rising prices) occurs when
interest rates rates increase and aggregate demand falls
consumer confidence falls and aggregate demand falls
consumer confidence rises and aggregate demand increases
aggregate supply is greater than aggregate supply
10
Investment in the circular flow of income can be defined as
Cash deposited into financial institutions
the purchase of capital by business to increase production
Spending by households on capital items e.g.. a new car
Spending by business on wages to households supplying labour
11
Which two sectors form the core of the circular flow of income?
Firms/Business and Government
Households and Firms/Business
Government and Financial sector
Households and Government
12
A contraction or downturn in economic activity can be explained by
Leakages greater than injections
Injections greater than leakages
2 successive quarters of negative growth
Leakages equal injections
13
Aggregate demand can be defined as
Total expenditure by business on final goods and services
Total expenditure on final Australian made goods & services
Total production by business in Australia
Total expenditure on overseas goods and services
14
From the circular flow of income aggregate demand represents
G+I+(X-M)
C+I+(X-M)
C+I+G-M
G+I+C-M+X
15
Which of the following factors does not influence the level of AD in an economy
The costs of production
Disposable income
Business confidence
The general level of prices
16
Which of the following does not impact on material living standards?
General feeling of well being
Access to goods and services
Purchasing Power
Literacy rates
17
What is the likely impact on AD of an increase in the consumer confidence index from 99 to 110?
Decrease private consumption spending and AD
Decrease spending on imports and AD
Increase private consumption spending and AD
Increase investment spending and AD
18
Which of the following is likely to lead to the largest increase in AD?
A 50% increase in G
A 50% increase in (X-M)
A 50% increase in I
A 50% increase in C
19
Non material living standards can be measured using
Gross Domestic Product
A happiness of life satisfaction index
A measure of affluenza
Consumer confidence
20
Which statement best describes the business cycle?
Changes in economic activity (real GDP) over time
Booms and recessions experienced by an economy
Changes in employment levels over time
Peaks and troughs experienced by an economy
21
Unemployment and a contraction in the business cycle occurs due to
a lack of job opportunities in winter
a lack of aggregate demand
a lack of skilled workforce
a lack of aggregate supply
22
Real GDP and the unemployment rate are both lagging indicators
False
True
23
An increase the value of the Australian dollar (appreciation) will lead to
An increase in AD
A decrease in imports
An increase in exports
A decrease in AD
24
Changing interest rates will affect the following components of aggregate demand
investment spending
consumption spending
net exports and government spending
consumption and investment spending
25
A decrease in the exchange rate for the AUD means
The price of AUS exports in AUD increases
The price of AUS exports in AUD decreases
Demand for imports will increase
Demand for exports will decrease

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