* not completed

. Macroeconomics is concerned with which one of the following?

The study of the behaviour of individual households and firms correct incorrect

The determination of the relative prices of particular goods and services correct incorrect

The knowledge and skills of workers in an economy correct incorrect

The study of the behaviour and performance of the economy as a whole correct incorrect

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. The main objectives of macroeconomic policy are:

A high and stable level of employment correct incorrect

A low and stable rate of inflation correct incorrect

A stable and satisfactory rate of economic growth correct incorrect

All of the above correct incorrect

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. Structural or mismatch unemployment arises in which one of the following situations?

When people find themselves temporarily between jobs in the labour market correct incorrect

A deficiency of aggregate demand correct incorrect

When inflation is accelerating correct incorrect

When labour released from declining industries does not have the skills required to fill, or is not living in the location where there are, existing job vacancies correct incorrect

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. The full costs of increased unemployment entail:

Loss of tax revenue for the authorities correct incorrect

Financial hardship experienced by the unemployed and their families correct incorrect

A range of potential social and political consequences correct incorrect

All of the above correct incorrect

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. As inflation increases and becomes more volatile, resulting in greater uncertainty, which of the following is most likely to occur?

The price system becomes less efficient as a coordinating mechanism correct incorrect

Investment by firms is likely to increase correct incorrect

International competitiveness is likely to improve correct incorrect

Consumption by households is likely to increase correct incorrect

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. When outflows to the unemployment pool are greater than inflows, the level of unemployment will:

Rise correct incorrect

Fall correct incorrect

Remain unchanged correct incorrect

Rise initially and then fall correct incorrect

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. If the economy is operating at its full capacity or potential GDP, following a decline in business confidence which one of the following is most likely to occur?

Investment is likely to fall and unemployment is likely to increase correct incorrect

Investment and employment are likely to remain unchanged correct incorrect

Firms are likely to increase their investment in new plant and machinery correct incorrect

None of the above correct incorrect

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. According to the original Phillips curve, as unemployment falls:

Inflation decreases correct incorrect

Inflation remains unchanged correct incorrect

Inflation increases correct incorrect

Output falls correct incorrect

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. The natural rate of unemployment can be reduced by:

Increasing aggregate demand via expansionary fiscal and monetary policies correct incorrect

Introducing various supply-side initiatives designed to improve the structure and functioning of the labour market correct incorrect

Increasing aggregate demand via expansionary fiscal and monetary policies, and introducing various supply-side initiatives designed to improve the structure and functioning of the labour market correct incorrect

None of the above correct incorrect

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. The UK's inflation target is which one of the following?

1 per cent correct incorrect

1-2 per cent correct incorrect

2-3 per cent correct incorrect

2 per cent correct incorrect

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. What is the main benefit of a fall in the value of the pound?

It makes UK exports cheaper in foreign markets correct incorrect

It reduces the rate of inflation correct incorrect

It encourages British firms to invest more in foreign markets correct incorrect

It encourages the Bank of England to reduce interest rates correct incorrect

* not completed

. What is the principal cost of membership of the euro area?

The euro is a weak currency so adopting it is inflationary correct incorrect

The euro is a strong currency so adopting it makes exporting more difficult correct incorrect

Joining the euro area means aligning your economy with notoriously weak economies such as Greece correct incorrect

Members of the euro area must surrender monetary policy independence correct incorrect