multiple choice (1 Viewer)

[Arithela]

1. Which one of the following most likely indicates a trend towards greater globalisation?

a) increases in the growth rate of developing countries
b) increases in the trade barriers between countries
c) increases in the volatility of country's exchange rates
d) increases in the value of global trade as a proportion of total output

(I chose a) but the answer disagrees)

2.Which of the following statements is appropriate if S + T + M is less than I + G +X, in the short run?

a) the Federal Budget is in surplus
b) unemploymenty will result
c) stocks will decrease
d) the economy will contract

 

[white ferret]

1d. 2c.

 

[Arithela]

reasons?

 

[white ferret]

1. process of elimination? a) may not be necessarily true, as they may not have the necessary policies to embrace globalisation, hence it will not necessarily increase their growth rate. b) is usually the opposite. c) not necessarily.

2. injections > leakages. hence economy must be expanding. as economy expands, demand increases, hence stocks will decrease assuming that supply remains the same.

 

[gnrlies]

1. Which one of the following most likely indicates a trend towards greater globalisation?

a) increases in the growth rate of developing countries
b) increases in the trade barriers between countries
c) increases in the volatility of country's exchange rates
d) increases in the value of global trade as a proportion of total output

(I chose a) but the answer disagrees)

You sure the question isn't asking what DOESN'T indicate globalisation? A, C and D are all correct.

2.Which of the following statements is appropriate if S + T + M is less than I + G +X, in the short run?

a) the Federal Budget is in surplus
b) unemploymenty will result
c) stocks will decrease
d) the economy will contract

In this case leakages are less than injections. As a result in order to satisfy the excess demand there will be an untended run down in stocks. So C - stocks will decrease.

These are both poorly written questions so I wouldn't worry too much about it.

 

[xsjado]

1. Which one of the following most likely indicates a trend towards greater globalisation?

d) increases in the value of global trade as a proportion of total output

2.Which of the following statements is appropriate if S + T + M is less than I + G +X, in the short run?

a) the Federal Budget is in surplus
b) unemploymenty will result
c) stocks will decrease
d) the economy will contract

I don't think any of these are right.
S T M are leakages and I G X are injections.

When injections > leakages the economy will expand, so D is wrong.

There is not direct relationship with stocks, so I can't see how it is C.

When injections > leakages there will be economic growth so there would be less unemployment, so B is wrong.

When G>T there is a budget deficit, so A is wrong.

EDIT to Gnrlies: A C and D can be correct, but it asks for the most likely. So it's D.

 

[gnrlies]

1. Which one of the following most likely indicates a trend towards greater globalisation?

d) increases in the value of global trade as a proportion of total output

2.Which of the following statements is appropriate if S + T + M is less than I + G +X, in the short run?

a) the Federal Budget is in surplus
b) unemploymenty will result
c) stocks will decrease
d) the economy will contract

I don't think any of these are right.
S T M are leakages and I G X are injections.

When injections > leakages the economy will expand, so D is wrong.

There is not direct relationship with stocks, so I can't see how it is C.

When injections > leakages there will be economic growth so there would be less unemployment, so B is wrong.

When G>T there is a budget deficit, so A is wrong.

This is quite common terminology used in Keynesian theory that might not be so obvious unless you've read the general theory of employment interest and money which I am sure none of you have. This is why it is a stupid question to be asking 17/18 year olds.

 

[gnrlies]

EDIT to Gnrlies: A C and D can be correct, but it asks for the most likely. So it's D.

A and C are equally as likely as D. So its A C and D

 

[Arithela]

what are stocks?

 

[gnrlies]

what are stocks?

Well generally it just means unconsumed production. So if you have a factory that produces steel but you only sell half of the steel that you have produced you have a build up of stocks.

When you say 'stocks will decrease' it just means that previously unconsumed produce is being consumed. So you might use that steel in the next period.