The Boratstan Bureau of Statistics reported that the unemployment rate for March 2021 was reported to be 5.0%.

Table 1

The Country's population	26.5 million
The labour force	17.0 million
Participation rate	68%
Unemployment rate	5.0%

Referring to the data in Table 1 above, calculate how many people are estimated to be unemployed.

Select one:

a.850,000

b.578,000

c.1,325,000

d.901,000

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Suppose the government increases the tax on gasoline/petrol in order to raise revenue. Since raising the gasoline tax would increase the price of gasoline/petrol; the government must be assuming that the:

Select one:

a.demand for gasoline/petrol is price elastic

b.demand for gasoline/petrol is price inelastic

c.demand for gasoline/petrol is price unit elastic

d.tax on gasoline/petrol will not effect the consumption of gasoline/petrol

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If the economy is operating in the far left of the Keynesian area of the aggregate supply curve, The Central Bank of that country is likely to:

Select one:

a.Increase interest rates to suppress aggregate demand and shift the aggregate demand curve to the left

b.Decrease interest rates to suppress aggregate demand and shift the aggregate demand curve to the left

c.Increase interest rates to stimulate aggregate demand and shift the aggregate demand curve to the left

d.Decrease interest rates to stimulate aggregate demand and shift the aggregate demand curve to the right

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A store of value deteriorates when:

Select one:

a.The government ceases to print money whatsoever.

b.Inflationary expectations/levels are low.

c.Inflationary expectations/levels are high.

d.The currency appreciates against another currency.

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Country A has been experiencing a period of limited growth in the economy and inflation rates have been relatively low. The fiscal budget is now catering for an increase in government spending which should, ceteris Paribas, cause aggregate:

Select one:

a.Demand to shift outward

b.Supply and aggregate demand to both shift equally outward

c.Supply to shift inward then outward

d.Demand to shift inward

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If the economy is in a recession, an appropriate combination of monetary and fiscal policies might beto:

Select one:

a.increase taxes, lower government spending, expand the money supply

b.increase taxes, raise government spending, expand the money supply

c.decrease taxes, raise government spending, expand the money supply

d.decrease taxes, lower government spending, contract the money supply

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Pretend that Limitland only produces two (2) goods to the galaxy of other economies. They produce Hunting rifles and Starflight bow & arrows. If this economy is producing at a point inside the production possibilities frontier, we can assume that:

Select one:

a.The economy demonstrates it has invested a unique technology, and the economy has expanded due to exogenous growth

b.The economy is using all of its resources to an optimal level of production

c.The economy is unable to produce at a level inside the production possibilities frontier

d.The economy might have some spare land, and people who are unemployed

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Which of the following are the same at all levels of output under perfect competition:

Select one:

a.Average cost and marginal cost

b.Marginal cost and marginal revenue

c.Price and marginal cost

d.Price and marginal revenue

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If interest rates in Jerryland were to increase significantly, while the interest rates of Jerryland's trading partners were to remain stable and relatively low, then the likely effects would be:

Select one:

a.Jerryland's currency would appreciate against other countries due to investors purchasing Jerryland's government bonds

b.Jerryland's currency would depreciate against other countries due to investors purchasing Jerryland's government bonds

c.Jerryland's currency would appreciate against other countries due to investors selling Jerryland's government bonds

d.Jerryland's currency would depreciate against other countries due to investors selling Jerryland's government bonds

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The manager of the local general store, known as Gaston Groceries conducted some research into the price elasticity coefficients of demand for 3 grocery items. Table 4 lists these price elasticity coefficients of demand.

Product	Price elasticity coefficient of demand
Product A	0.6
Product B	1.00
Product C	1.35

Table 4

You are required to interpret this information and advice the manager of Gaston Groceries as to how effective a change in price will be in any of these items, to increase revenue for the store. You are most likely to tell the manager that:

Select one:

a.If the price of product A is increased, revenue will most likely increase

b.If the price of product A is decreased, revenue will most likely increase

c.If the price of product B is decreased, revenue will most likely increase

d.If the price for either product B or C is increased, revenue will most likely increase

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If The Sequenceland Central Bank wants to effect an increase in interest rates across the economy, it will most likely:

Select one:

a.Buy bonds to decrease the money supply

b.Sell bonds to decrease the money supply

c.Buy bonds to increase the money supply

d.Sell bonds to increase the money supply

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The price elasticity of demand coefficient for a good will be less:

Select one:

a.If there are few or no substitutes available

b.In the short run than in the long run

c.If a larger portion of the budget will be spent on it

d.If overall workers incomes remain the same

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If Oligopolists successfully form a new 'cartel', likely effects are:

Select one:

a.Prices will be higher

b.Output will be lower

c.It is unlikely that members will try to cheat by secretly lowering prices

d.Both a and b above are correct

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If the price of product K decreases, the demand curve for close-substitute product S will:

Select one:

a.remain unchanged but quantity demanded only will change as price changes.

b.shift upward toward the horizontal axis.

c.shift to the left.

d.shift to the right.

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Which of the following isnota characteristic of monopolistic competition:

Select one:

a.A large number of small firms

b.Easy market entry

c.Economies of scale

d.A differentiated product

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If the government in Hoganland decides only one size of coffee can be served and that the price of coffee served in a coffee shop should be $4.00 even though the market price determined by demand and supply is $3.50, then regulators have imposed:

Select one:

a.a new equilibrium

b.a binding price ceiling

c.a binding floor price

d.a free market to solve all the problems of the tragedy of commons

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Several types of guns are sold and used in Tatooine, but blaster rifles are the only type produced by Tatooine. They trade with Alderan for sniper rifles. Table 3 below outlines the number of hours each country's people are required to make each type of rifle, assuming both countries make their own rifles of both types.

Table 3

	Hours needed to make one unit of	Amount produced in 1000 hours
	Blaster rifles	Sniper rifles	Blaster rifles	Sniper rifles
Tatooine	50	40	80	100
Alderan	40	36	100	111

According to Table 3:

Select one:

a.The opportunity cost to Alderan to make a blaster rifle is less than the cost to Tatooine to make a blaster rifle in terms of snipers rifles

b.The opportunity cost to Alderan to make a blaster rifle is more than the cost to Tatooine to make a blaster rifle in terms of snipers rifles

c.Tatooine has an absolute advantage in sniper rifles so should be making sniper rifles not blaster rifles

d.Alderan does not have a comparative advantage in either rifles

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If the real Gross Domestic Product (GDP) in Possibeland during 2020 was reported to be AUD $2.7 trillion, and nominal GDP was reported to be $3.3 trillion, the price deflator index for 2020 in Possibleland was:

Select one:

a.122

b.119

c.1.22%

d.1.22

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In 2020, The Dynasty Bureau of Statistics reported that the consumer price index increased from 130 to 139 in 2020. Therefore, the rate of inflation for 2019 was:

Select one:

a.1.39%

b.6.92%

c.4.25%

d.6.47%

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The Empire People's Central Bank mandates that areserve ratio requirementfor all banks be set at 10%. If outstanding deposits at all Banks total $3 bn and thereserve requirement is decreased to 5%,the supply of money available through credit creation will:

Select one:

a.Increase by $60 bn

b.Decrease by $60 bn

c.Increase by $30 bn

d.Not change at all

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Hoganland's regulations were not extended to the prices of alternative and substitute products such as tea, hot chocolate, and chai lattes, which all cost approximately the same as the coffee prior to the regulations. Therefore, the demand curves for the substitute products could reasonably be expected to:

Select one:

a.Shift upward toward the horizontal axis

b.Shift to the left

c.Remain unchanged, but quantity demanded will decrease

d.Shift to the right

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The firm that produces armed weaponry in Combatland is known as Infantry Weaponry Ltd. Pricing regulations in Combatland prohibits price collaboration between companies. Figure 1 below outlines the resulting profits that each firm will make depending on whether they set their prices to be the same, set higher prices, or set lower prices than each other. It would be best for the industry if they both set their prices high, but neither firm will want to lose business by not being price competitive.

		Attack Helicopters
		High price	Low price
Jet Fighters	High price	$15m $15m	$5m $20m
Low price	$20m $5m	$10m $10m

Figure 1

Refer to Figure 1. If price is set independently by each firm, the profits of Attack Helicopters and Jet Fighters will most likely be:

Select one:

a.$15m each

b.$20m and $5mil

c.$5m and $20mil

d.$10m each

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The following table represents the marginal revenue and marginal cost for a firm:

Table 2

Output	Marginal Revenue $m	Marginal Cost $m
10	8	5
20	9	6.5
30	10	10
40	11	12

Interpret the data in Table 2 and select the correct statement:

Select one:

a.The firm is a monopoly and is most profitable at 20 units

b.The firm is perfectly competitive and is most profitable at 20 units

c.The firm is a monopoly and is most profitable at 30 units

d.The firm is perfectly competitive and is most profitable at 10 units

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