31) A business might become a multinational in order to obtain A) a spread of risks. B) lower production costs. C) larger sales. D) all of the above
Can you answer those questions, please?
31) A business might become a multinational in order to obtain
- A) a spread of risks. B) lower production costs.
- C) larger sales. D) all of the above
32) Which of the following explains why China has received relatively high levels of FDI?
- A) All of the above
- B) Heavy investment by the government
- C) The economy is growing rapidly
- D) It is a huge economy, with a massive population
33) Transfer pricing may be a problem for host countries as
- A) profits may not be accurately recorded as occurring in the host country.
- B) the cost of exchanging one currency for another is costly in monetary terms and time.
- C) prices are transferred to the local currency resulting in losses if exchange takes place on a day when the exchange rate is 'low'.
- D) profits are always removed to the host country
34) If the budget deficit is lower than it was last year, we could say that
- A) the general government debt will fall.
- B) other things being equal, the level of aggregate demand will be higher than it was last year.
- C) other things being equal, the level of aggregate demand will be lower than it was last year.
- D) the government must have an expansionary fiscal stance
35) When a country has public-sector net borrowing, it means that
- A) the government has accumulated debt over a number of years.
- B) the total expenditure of central government, local government and public corporations exceeds the tax revenues and sales revenues collected by those bodies.
- C) central government's spending exceeds its tax receipts.
- D) nationalised industries are being subsidised.
36) An automatic fiscal stabiliser is
- A) a monetary or fiscal policy that aims to smooth out the business cycle.
- B) the tendency for inflation to fall as
unemployment rises. - C) a tax or form of government expenditure that has the effect of reducing the size of the multiplier.
- D) the tendency for exchange rates to adjust automatically to changes in the demand and supply of foreign currency
37) If the economy were in recession, we would expect
- A) government expenditure to be high and tax revenues to be low causing a large public-sector deficit.
- B) government expenditure to be high and tax revenues to be high so that the government might have a low PSNB.
- C) government expenditure to be low and tax revenues to be low so that the government could run a public sector surplus.
- D) none of the above
38) The UK Labour government was forced to abandon its 'golden rule' in 2008/9 because
- A) the fiscal multiplier was not working.
- B) the EU declared that it was not compatible with the Stability and Growth Pact.
- C) it wished to pursue discretionary fiscal policy to tackle the recession.
- D) it had to increase taxes to tackle the rise in the budget deficit.
39) An example of a tight
- A) an increase in the tax rate.
- B) a decrease in the liquidity ratio.
- C) a decrease in the bank rate.
- D) the Bank of England selling government securities in the open market
40) Assume that the UK's unemployment rate is 10% and the inflation rate is 1%. The most likely policy for the Bank of England to pursue would be to
- A) decrease interest rates to try to eliminate unemployment.
- B) increase interest rates to try to bring the inflation rate to zero.
- C) decrease interest rates so long as predicted inflation remained below 2%.
- D) do nothing because the inflation rate is so low
41) Which of the following represents an action by a central bank which has the effect of decreasing the money supply?
- A) Selling government securities in the open market
- B) An increase in tax rates.
- C) Increasing the proportion of Treasury bills to government bonds that it uses to finance government borrowing
- D) A decrease in its repo rate
42) An open-market purchase of securities by the Bank of England results in ________ in reserves and ________ in the supply of money.
- A) an increase; an increase B) a decease; an increase
- C) an increase; a decrease D) a decrease; a decrease
43) Some government regulations imposed on business have the impact of reducing productivity.
The elimination of these regulations would be an example of
- A) competition policy. B) fiscal policy.
- C) monetary policy. D) supply-side policy
44) A key supply-side policy is to make sure that workers are well trained. Which of the following is true?
- A) UK labour turnover is less than that of comparable countries.
- B) The UK spends a smaller percentage of its
GDP on training than comparable countries. - C) UK workers are better educated than US workers.
- D) UK workers are better trained than German workers
45) Assume that Outland specialises in producing skateboards and Inland specialises in producing surfboards. After trade, Outland exports 500 skateboards and imports 100 surfboards. The rate of exchange
- A) is 1/5:1 skateboards to surfboards.
- B) is 5:1 skateboards to surfboards.
- C) is 1:5 skateboards to surfboards.
- D) cannot be determined from this information
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