WJEC A-Level Economics Economics in Action (AS Unit 2) overview quiz quiz

Investment by firms

Government spending

Spending on imports

Export earnings

0.25

1.25

2.5

4

injections are greater than withdrawals

withdrawals are greater than injections

injections exactly equal withdrawals

the marginal propensity to consume falls to zero

AD = C + I + G + (X - M)

AD = C + S + T + M

AD = C + I + G + (M - X)

AD = wages + rent + interest + profit

A fall in the price of imported raw materials

A rise in wage costs across the economy

An increase in consumer confidence

A cut in the rate of interest

raise real output permanently with no effect on prices

lower the price level and raise output

raise only the price level in the long run, with no lasting rise in output

have no effect on either output or the price level

Aggregate supply is always vertical at full-capacity output

Aggregate supply slopes downwards from left to right

Aggregate demand has no effect on real output at any time

Aggregate supply has a horizontal range at low output, so demand can raise output with spare capacity

Maximising the budget deficit

Low and stable inflation

Eliminating all imports

Removing the price mechanism

higher incomes raise spending on imports, worsening the current account

growth always reduces the demand for a country's exports

growth automatically eliminates a current account deficit

faster growth has no effect on imports at all

An increase in government spending on infrastructure

A cut in the rate of income tax

A reduction in the central bank's bank rate

An increase in spending on the health service

raise the productive potential of the economy, shifting LRAS to the right

increase aggregate demand quickly to end a recession

raise the price level to encourage spending

reduce the money supply to control imports

exports become dearer and imports cheaper

exports become cheaper to foreigners and imports become dearer to domestic buyers

both exports and imports become cheaper

neither exports nor imports change in price

the price elasticities of demand for exports and imports sum to more than one

exports and imports both have perfectly inelastic demand

the exchange rate is fixed by the central bank

the country runs a budget surplus

it can produce using the largest quantity of resources

that are most popular with its own consumers

it can produce at a lower opportunity cost than other countries

that require no imported raw materials at all

A tariff (tax) on imported goods

A floating exchange rate

An independent central bank

A rise in consumer confidence