Hello, can you double-check these answers, please? I already got the answers to these questions but I wanted to make sure they are correct? 3) When the price of a good falls and customers tend to buy...

Hello, can you double-check these answers, please? I already got the answers to these questions but I wanted to make sure they are correct?

3) When the price of a good falls and customers tend to buy more of it instead of other goods, economists call this the ________ effect.

A) substitution B) diminishing marginal utility

C) income      D) ceteris paribus

Correct: D

11) Suppose that it is observed that the price of a commodity rises and that the quantity sold falls. From this we can deduce

1. A) that the demand curve has shifted to the left, but we cannot deduce whether or not the supply curve has shifted.


2. B) that the demand curve has shifted to the right, but we cannot deduce whether or not the supply curve has shifted.


3. C) that the supply curve has shifted to the right, but we cannot deduce whether or not the demand curve has shifted.


4. D) that the supply curve has shifted to the left, but we cannot deduce whether or not the demand curve has shifted

Correct: A

35) When a country has public-sector net borrowing, it means that

1. A) the government has accumulated debt over a number of years.


2. B) the total expenditure of central government, local government and public corporations exceeds the tax revenues and sales revenues collected by those bodies.


3. C) central government's spending exceeds its tax receipts.


4. D) nationalised industries are being subsidised.

Correct: D.

36) An automatic fiscal stabiliser is

1. A) a monetary or fiscal policy that aims to smooth out the business cycle.


2. B) the tendency for inflation to fall as unemployment rises.


3. C) a tax or form of government expenditure that has the effect of reducing the size of the multiplier.


4. D) the tendency for exchange rates to adjust automatically to changes in the demand and supply of foreign currency

Correct: A

41) Which of the following represents an action by a central bank which has the effect of decreasing the money supply?

1. A) Selling government securities in the open market


2. B) An increase in tax rates.


3. C) Increasing the proportion of Treasury bills to government bonds that it uses to finance government borrowing


4. D) A decrease in its repo rate

Correct: A

47) Which of the following is NOT a valid argument for protection?

1. A) To keep declining industries going in the long run in order to safeguard jobs


2. B) To prevent dumping by other countries from giving them an unfair advantage over domestic suppliers


3. C) To allow infant industries to survive foreign competition


4. D) To allow older industries with a potential comparative advantage a chance to make significant investments

Correct: D

50) Which of the following policies could a government or central bank pursue to prevent the exchange rate from depreciating?

1. A) Raise interest rates


2. B) Increase the money supply through open-market operations


3. C) Raise taxes


4. D) Buy foreign currencies on the foreign exchange market

Correct: 50