Question 5 of 25

2 Points

In the AD-AS model, a simultaneous decrease in output and price level in the economy is an outcome of...

• A. a reduction in wage rates bargained by labor unions
• B. an increase in the costs of production.
• C. contractionary demand management policies.
• D. a supply shock.

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Question 14 of 25

2 Points

Demand-pull inflation can be combated by ...

• A. lowering interest rates.
• B. increasing government spending.
• C. decreasing personal income tax.
• D. raising interest rates.

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Question 22 of 25

2 Points

Which of the following is a shortcoming of GDP?

• A. GDP measures all final goods and services to avoid double counting.
• B. GDP of South Africa does not include the value of imports into South Africa.
• C. GDP is only measured over a certain period, usually a year.
• D. The work done by housewives is not recorded in the value of GDP.
• E. The work done in the formal sector is recorded in the value of GDP.

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Question 23 of 25

2 Points

The upward phase of a business cycle is known as a...

• A. recession.
• B. peak.
• C. boom.

1. D. downswing.