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IB Economics - micro and macro revision Flashcards | StudBud
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IB Economics - micro and macro revision
IB Economics - micro and macro revision
60 terms
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A quiz for IB Economics students to revise micro and macro concepts
Flashcards
60 cards
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Questions
60
Answers
1
Imports are a form of:
injections
Leakages
2
Which of the following is NOT a reason for governments imposing an excise tax:
Improve allocation of resources
Increasing supply
Discourage harmful goods
Government revenue
3
Which one is not an example of positive production externalities?
Firms training workers
Eco-tourism
Development of a new medication
R&D
4
As the price of a good increases, the quantity supplied also increases
False
True
5
When does allocative efficiency occur?
MPC=MPB
MSC=MPB
MSC=MSB
MPC=MSB
6
What does this graph show in terms of externalities?
Negative consumption externality
Negative production externality
Positive production externality
Positive consumption externality
7
Monetary policy impacts indirectly on aggregate demand through the…
Rate of interest
Rate of unemployment
Rate of inflation
Rate of deflation
8
When will the production possibilities curve shift outwards?
An increase in net exports
An improvement in resource quality
Unemployment falls from 6% to 4%
New machines improve product efficiency
9
Supply-side policies are aimed to increase the economy’s potential output.
False
True
10
If a country has growth in general price level of 6% and 5% for 2 years, what's the situation?
Deflation
Disinflation
Inflation
11
If a leakage is smaller than an injection the size of the circular flow becomes larger.
True
False
12
Which is NOT a non-price determinant of demand
Costs of production
Price of substitute goods
Income in the case of normal goods
Preferences and tastes
13
What are two characteristics of a public good?
Rivalrous
Non-rivalrous
Excludable
Non-excludable
14
Prices of related goods is NOT a non-price determinant of supply
False
True
15
If the general price level rises due to an increase in AD, what kind of inflation is this?
Demand-pull inflation
Cost-push inflation
16
What does this graph show in terms of externalities?
Negative production externality
Positive production externality
Negative consumption externality
Positive consumption externality
17
If the cross price elasticity of demand between two goods is negative, then the two goods are…
Normal goods
Substitutes
Complements
Unrelated goods
18
A rise in the price of a product is likely to raise total revenue where PED is unit elastic.
False
True
19
Which is a reason governments provide subsidies?
Make goods more expensive
Increased government revenue
Encourage production and consumption
Slow economic growth
20
Monetary policy is carried out by the central bank of each country.
True
False
21
In the demand function, the letter ‘b’ indicates
Bananas
A movement of the demand
A shift in the demand
Steepness of the demand
22
‘Marginal social cost is greater than marginal private cost’ is which form of market failure?
Positive consumption externality
Negative consumption externality
Positive production externality
Negative production externality
23
GDP is the market value of primary goods & services produced in an economy in a period of time.
False
True
24
What is not a result of unemployment?
A loss of government’s tax revenue
A fall in the price of alcohol
Increased drug use and crime rates
Household indebtedness
25
Which of the following is not a strength of monetary policy?
No political constraints
No crowding out
Time lags
Relatively quick implementation
26
A Lorenz curve shows the relationship between...
Inflation and unemployment
Quantity demanded and price level
Cumulative % of income and cumulative % of population
Time and economic activities
27
Which of the followings is an example of interventionist supply side policy?
Trade Liberalisation
Tax Reform
Deregulation
Training program
28
A positive YED indicates that a rise in real income will shift the demand curve to the right.
True
False
29
Of the following, demand is likely to be the least elastic for
Diamonds
Iceberg lettuce
Pink grapefruit
Insulin for diabetics
30
How is unemployment calculated?
The number of people unemployed over the work force
The no. of people who don't have a job over the population
The number of people unemployed over the population
The no. of people who don't have a job over the work force
31
Nominal GDP does not eliminate the influence of price changes.
True
False
32
As you move down a straight-line-downward-sloping demand curve, the price elasticity of demand…
Becomes less elastic
More/less elastic depending on the slope of the demand curve
Remains constant because the slope is constant
Becomes more elastic
33
The supply curve has a negative gradient
True
False
34
What is a price floor?
A legally set maximum price
A legally set minimum price
35
Which of the following is not a weakness of monetary policy?
Conflict between government objectives
Possible ineffectiveness in recession
Inability to deal with stagflation
Ability to increase interest rates incrementally
36
Producers control the demand curve
False
True
37
What will occur if there is a negative production externality?
Underallocation of resources to the production of the good
Efficient allocation of resources
Overallocation of resources to the production of the good
38
What does the arrow in this diagram indicate?
Equilibrium
Shortage
Welfare benefit
Welfare loss
39
GNI is the total income received in a single country excluding income sent in from abroad.
True
False
40
The vertical difference between MSC and MPC represents the external costs.
False
True
41
The greater the Gini coefficient is, the more imbalanced the income distribution in an economy.
False
True
42
Green GDP is:
GDP divided by the value of environmental degradation
GDP times the value of environmental degradation
GDP minus the value of environmental degradation
GDP plus the value of environmental degradation
43
The supply of money is fixed at a level that is decided upon by…
The consumers
The commercial banks
The central bank
The government
44
What are common access resources?
Do not have a price
All statements are correct
Available for everyone to use
They are not owned by anyone
45
Ad valorem taxes are:
A fixed percentage of the price
A fixed amount per unit
46
Measuring GDP with the expenditure approach gives a different result using the income approach.
True
False
47
The supply function looks like this: Qd = a–bP
True
False
48
Market equilibrium occurs
When supply and demand are equal
When there is more demand than supply
What is market equilibrium !!
When there is more supply than demand
49
Which of the following is not a responsibility of a central bank?
Regulator of commercial banks
Banker to the government and commercial banks
Conduct fiscal policy
Conduct monetary policy
50
Demand is perfectly inelastic when
Supply curve shifts result in no change in quantity demanded
Supply curve shifts result in no change in the total revenue
Shifts in the supply curve results in no change in price
The good in question has perfect substitutes
51
An increase in interest rates will increase C and I and therefore shift AD to the right.
True
False
52
Different types of dishwashing liquid are likely to have a positive cross elasticity of demand
True
False
53
What is inflation?
A fall in price level
An increase in the general price level
A sustained increase in the general price level
A rise in price level
54
The objective of expansionary monetary policy is to contract AD and therefore slow the economy.
False
True
55
An increase in the supply of money leads to a fall in the rate of interest.
False
True
56
How is an increase in demand shown on a diagram?
Movement left along the line
Rightward shift
Movement right along the line
Leftward shift
57
CPI reflects the consumption patterns for households in rural areas.
True
False
58
Demerit goods are goods that are considered to be desirable for consumers
True
False
59
What are some government responses to threats to sustainability?
Legislation
Neither legislation or taxes
Both legislation and taxes
Taxes
60
A decrease in the supply of money leads to an increase in the rate of interest.
True
False
