Economics for Business Question
Bank
Course Introduction
Economics for Business examines the core principles of microeconomics and macroeconomics as they apply to modern business environments. The course explores how markets function, the roles of supply and demand, pricing strategies, and the impact of government policies on firms and consumers. Students learn to analyze economic trends, assess market opportunities, and understand the economic forces shaping business decisions. Emphasis is placed on real-world case studies, enabling students to apply economic reasoning to solve practical business problems and to make informed managerial choices in domestic and global contexts.
Recommended Textbook
Macroeconomics Australia in the Global Environment 1st Australian Edition by Michael Parkin
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17 Chapters
2734 Verified Questions
2734 Flashcards
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Page 2
Chapter 1: Getting Started
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272 Verified Questions
272 Flashcards
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Sample Questions
Q1) Scarcity means we must
A)work more.
B)make choices.
C)earn more.
D)consume less.
E)produce less.
Answer: B
Q2) In the above figure,which of the figures show a relationship between x and y with a negative slope?
A)Figure A
B)Figure B
C)Figure C
D)Figure D
E)Both Figure A and Figure B
Answer: B
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Chapter 2: The Australian and Global Economies
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) The decisions of firms and households are
A)made independently of one another.
B)coordinated by but not totally controlled by the government.
C)coordinated by markets.
D)controlled by but not totally coordinated by the government.
E)unexplainable by the circular flow model.
Answer: C
Q2) ________ the owners of the factors of production,while ________ what amounts of those factors to hire.
A)Firms are;the government determines
B)Households are;the government determines
C)Households are;firms determine
D)Firms are;households determine
E)The government is;firms determine
Answer: C
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4
Chapter 3: The Economic Problem
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218 Verified Questions
218 Flashcards
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Sample Questions
Q1) While moving on the production possibilities frontier,if the opportunity cost of producing one good is 1/2,the opportunity cost of producing the other good (in the same range)is
A)1/4.
B)2.
C)4.
D)1/2.
E)An amount that cannot be calculated without more information.
Answer: B
Q2) Which of the following would most likely cause a country's production possibilities set to shift outward at every point along the frontier?
A)A general technological advance that affects all sectors of the economy
B)A decrease in idle capital
C)A decrease in unemployment
D)A technological advance in only one sector of the economy
E)None of the above
Answer: A
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Chapter 4: Demand and Supply
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Suppose the price in a market does NOT adjust to market equilibrium.This is likely a result of i.a price floor or ceiling.
Ii)sticky prices.
Iii)selling illegal goods.
A)i only
B)ii only
C)i,ii and iii
D)i and iii
E)i and ii
Q2) Advances in productivity increase supply because they might
A)increase the price expected in the future.
B)raise the prices of resources used to produce the good.
C)increase the number of firms producing the good.
D)decrease the cost of production.
E)decrease the number of goods available.
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6
Chapter 5: Gdp: a Measure of Total Production and Income
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) Which of the following is directly accounted for in the calculation of GDP?
A)The value of repairing your own kitchen sink,as measured by the average rates charged by local plumbers.
B)Improvements in quality of life from the reduction of pollution.
C)The value of one hour of leisure as measured by the hourly wage one would otherwise earn by working.
D)Cash earnings from an illegal poker game.
E)None of the above items is accounted for in GDP.
Q2) Government expenditures on goods and services include i.the local Library's purchase of new books.
Ii)ACT's road maintenance.
Iii)the State of Victoria's payment of wages to correctional service officers.
A)i and iii
B)i only
C)i,ii and iii
D)i and ii
E)ii and iii
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Chapter 6: Jobs and Unemployment
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133 Verified Questions
133 Flashcards
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Sample Questions
Q1) Andrew is not working,but is available and willing to work after finishing a month-long mission trip for his church.While on his mission,Andrew did not look for work.Andrew is considered
A)a marginally attached worker.
B)a discouraged job seeker.
C)part of the labour force.
D)unemployed.
E)Both answers A and B are correct.
Q2) If Brian,age 24,had no job but was available for work and had looked for a job in the four weeks before the survey,Brian is classified in the Labour Force Survey as A)not in the working-age population.
B)unemployed.
C)employed.
D)a discouraged worker.
E)not in the labour force.
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8
Chapter 7: The Cpi and the Cost of Living
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) If you are earning $20,000 this year and the CPI is 165,your real income in base-year prices is
A)$20,000.
B)$33,000.
C)$12,121.21.
D)$16,500.
E)$121.21.
Q2) Based on the table above,the cost of the base period market basket in 2015 is A)$4,885.
B)$4,650.
C)$3,300.
D)$3,885.
E)None of the above answers is correct.
Q3) If your nominal income is $75,000 and your real income in base year prices is $60,000,what is the CPI?
A)100
B)250
C)200
D)80
E)125
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Chapter 8: Economic Growth
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) Retirement savings,such as superannuation,help increase economic growth because
A)savings finances investment.
B)the government invests them.
C)they keep interest rates high.
D)they encourage international trade.
E)people have an incentive to work harder and longer hours to save for the future.
Q2) If Country A's real GDP grows at a rate of 14 per cent per year,about how many years will it take for Country A's real GDP to double?
A)10
B)5
C)30
D)7
E)14
Q3) The production function displays
A)increasing returns.
B)diminishing returns.
C)normal returns.
D)real returns.
E)average returns.
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Chapter 9: Finance,saving and Investment
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) In the figure above,the rightward shift from the demand for loanable funds curve DLF to the demand for loanable funds curve DLF ,could be the result of
A)a rise in the interest rate.
B)a fall in the interest rate.
C)a decrease in expected profit.
D)an increase in expected profit.
E)an increase in wealth.
Q2) In the figure above,the DLF curve is the demand for loanable funds curve and the PDLF curve is the private demand for loanable funds curve.If there is no Ricardo-Barro effect,the figure shows a situation in which the government has a budget
A)surplus of $0.5 trillion.
B)surplus of $1 trillion.
C)deficit of $1 trillion.
D)deficit of $0.5 trillion.
E)deficit of $1.5 trillion.
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Chapter 10: Money,the Price Level and Inflation
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213 Verified Questions
213 Flashcards
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Sample Questions
Q1) In the above figure,if the interest rate is 3 per cent per year,the quantity of money demanded is
A)greater than the quantity of money supplied,and the demand for money curve will shift.
B)greater than the quantity of money supplied,and the interest rate will change.
C)less than the quantity of money supplied,and the interest rate will change.
D)greater than the quantity of money supplied,and the supply of money curve will shift.
E)less than the quantity of money supplied,and the demand for money curve will shift.
Q2) A bank is defined as
A)any institution that makes loans.
B)any institution that accepts deposits.
C)a private firm that receives deposits and makes loans.
D)the institution that sets regulations for commercial activities.
E)a firm that obtains funds by selling shares.
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12
Chapter 11: Aggregate Supply and Aggregate Demand
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176 Verified Questions
176 Flashcards
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Sample Questions
Q1) The aggregate demand curve shifts when any of the following factors change EXCEPT
A)foreign income.
B)expectations about the future.
C)the price level.
D)fiscal policy.
E)monetary policy.
Q2) At a price level of 100,John has savings equal to $20,000.If the price level increases to 130,the buying power of John's savings is approximately
A)$15,400.
B)$12,780.
C)$26,000.
D)$30,000.
E)$20,000.
Q3) The slope of the aggregate supply curve shows that,all else the same,the
A)price level remains constant as potential GDP increases.
B)quantity of real GDP supplied increases as the price level increases.
C)quantity of real GDP supplied remains constant as the price level increases.
D)quantity of real GDP supplied decreases as the price level increases.
E)price level remains constant as real GDP increases.
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Chapter 12: Aggregate Expenditure Multiplier
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189 Verified Questions
189 Flashcards
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Sample Questions
Q1) If the slope of the aggregate expenditure curve is 0.75,the expenditure multiplier is equal to
A)4.00.
B)0.25.
C)5.00.
D)1.33.
E)0.75.
Q2) The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.When real GDP is $15 billion,firms' inventories experience an unplanned
A)increase of $10 billion.
B)decrease of $10 billion.
C)decrease of $1 billion.
D)increase of $4 billion.
E)increase of $5 billion.
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Chapter 13: The Short-Run Policy Trade Off
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134 Flashcards
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Sample Questions
Q1) Moving along the short-run Phillips curve,a ________ unemployment rate can only be achieved by paying the cost of ________.
A)higher;a higher inflation rate
B)lower;a higher expected inflation rate
C)lower;a lower inflation rate
D)lower;a lower price level
E)lower;a higher inflation rate
Q2) A rightward shift of the aggregate demand curve leads to
A)a downward movement along the short-run Phillips curve.
B)a leftward shift of the short-run Phillips curve.
C)a rightward shift of the short-run Phillips curve.
D)an upward movement along the short-run Phillips curve.
E)neither a movement along nor a shift in the short-run Phillips curve.
Q3) In the U.S.when inflation expectations changed during the 1967-1971 period,this change led to
A)an increase in the natural unemployment rate.
B)the long-run Phillips curve shifting rightward.
C)the short-run and the long-run Phillips curves both shifting upward.
D)the long-run Phillips curve shifting leftward.
E)the short-run Phillips curve shifting upward.
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Chapter 14: Fiscal Policy
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) Increasing the income tax rate ________ the ________.
A)decreases;supply of labour
B)increases;demand for labour
C)decreases;demand for labour
D)does not change;supply of labour
E)increases;supply of labour
Q2) Increasing the income tax rate ________ the before-tax real wage rate and ________ the after-tax real wage rate.
A)raises;lowers
B)raises;raises
C)lowers;lowers
D)lowers;raises
E)does not change;raises
Q3) Do automatic fiscal stabilisers eliminate business cycles?
A)Yes
B)No,they make business cycle fluctuations more severe.
C)No,because they have no effect if the business cycle is the result of some unanticipated change.
D)No,they increase the likelihood that a business cycle occurs.
E)No,but they do moderate business cycles.
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Chapter 15: Monetary Policy
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) If the Reserve Bank fears inflation,it ________ by ________ government securities to ________ the cash rate.
A)decreases aggregate demand;selling;raise
B)increases aggregate demand;selling;raise
C)decreases aggregate supply;selling;lower
D)increases aggregate supply;buying;lower
E)decreases aggregate supply;buying;raise
Q2) The main objectives of monetary policy include all of the following EXCEPT
A)the stability of the currency in Australia.
B)keeping the long-term nominal interest rate equal to the real interest rate plus the inflation rate.
C)the maintenance of full unemployment in Australia.
D)the economic prosperity and welfare of the people of Australia.
E)keeping the inflation rate within the target of 2 to 3 per cent.
Q3) Suppose monetary policy results in the exchange rate falling.As a result,
A)exports increase and imports increase.
B)exports decrease and imports decrease.
C)net exports increase.
D)exports do not change because they are autonomous and imports decrease.
E)net exports decrease.
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Chapter 16: International Trade Policy
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) The above figure shows the Australian market for replacement mobile phone batteries.With free trade,Australian production is equal to ________ batteries per year.When a $2 tariff is in place,Australian production is equal to ________ batteries per year.
A)100,000;300,000
B)300,000;100,000
C)100,000;500,000
D)900,000;700,000
E)300,000;500,000
Q2) Which of the following is an argument that is used for protection from free trade?
i.The national security argument.
ii.The infant-industry argument.
iii.The dumping argument.
A)i only
B)ii only
C)iii only
D)i and iii
E)i,ii and iii
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Page 18
Chapter 17: International Finance
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) When the exchange rate between the U.S.dollar and the euro changes from 1.07 euros per dollar to 0.93 euros per dollar,then the
A)U.S.dollar has depreciated against the euro.
B)U.S.dollar has depreciated against the dollar.
C)U.S.dollar has appreciated against the euro.
D)euro has depreciated against the euro.
E)euro has depreciated against the dollar.
Q2) Everything else the same,in the foreign exchange market which of the following increases the demand for Australian dollars and shifts the demand curve rightward?
A)The expected future exchange rate falls.
B)The Australian exchange rate falls.
C)The Australian interest rate rises.
D)The Australian exchange rate rises.
E)The Japanese interest rate rises.
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