Which of the following statements about a Taylor rule is NOT true?

A It can be used to influence expectations of inflation.

B It requires that interest rates be increased if inflation is above its target level.

C It requires that interest rates be increased if real GDP is above its potential level.

D It is open to political abuse.

An increase in government spending has:

A a greater impact than an equal decrease in taxation has on national income.

B the same impact as an equal decrease in taxation has on national income.

C a smaller impact than an equal decrease in taxation has on national income.

D a multiplier effect on national income that is smaller than the multiplier effect of an equal

decrease in taxation.

X3.18 A government wishing to increase aggregate demand might use any of the following measures

EXCEPT:

A buying government securities on the open market.

B allowing interest rates to fall.

C increasing the tax on consumer goods.

D increasing social security benefits.

The payment of wages to refuse collectors is categorised as both:

A current expenditure and final expenditure.

B capital expenditure and final expenditure.

C current expenditure and transfers.

D capital expenditure and transfers.

Suppose that in Country A, the budget surplus is 20, investment is equal to 50 and savings are equal

to 40. Then the trade balance must be equal to:

A -10.

B +10.

C -30.

D +30.

5 A single-premium policy provides the following benefits to a husband and wife each aged 40. (1) An annuity of 25,000 per annum, payable continuously, commencing on the husband's death within 25 years, or on his survival for 25 years, and continuing so long as either husband or wife is alive. (2) A return of half the single premium without interest immediately on the death of the husband within 25 years, provided that his wife has already died. The office issuing the contract uses the following basis: mortality : A1967-70 ultimate interest 4% per annum expenses are ignored. Calculate the single premium. 6 A husband and wife, aged 70 and 64 respectively, effect a policy under which the benefits are (1) a lump sum of 10,000 payable immediately on the first death, and (2) a reversionary annuity of 25,000 p.a. payable continuously throughout the lifetime of the surviving spouse after the death of the first. Level premiums are payable annually in advance until the first death. Calculate the annual premium on the undernoted basis: Males' Mortality: a (55) males ultimate Females' Mortality: a(55) females ultimate Interest: 8% p.a. Expenses: 10% of all premiums Ignore the possibility of divorce