OCR F585 January 2012: Extract 1 Quiz

Includes:

  • Definitions that should come in handy for Extract 1 of the Stimulus Material - most of the definitions are taken from the textbook.
  • Questions on the graphs
  • Comprehension questions on the text

Apologies in advance - it is a mammoth quiz

For answers see resource called OCR F585 JANUARY 2012: EXTRACT 1 QUIZ ANSWERS

This is essentially just a printable version of the quiz I've already made (but hopefully minus any errors)

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  • Created on: 24-12-11 16:00
Preview of OCR F585 January 2012: Extract 1 Quiz

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F585 January 2012 Stimulus Material Quiz
­ Extract 1
1. Definitions
1. What is a recession?
a. One quarter (three months) of negative growth
b. Two quarters (six months) of negative growth
c. Three quarters (nine months) of negative growth
d. Four quarters (one year) of negative growth
2. What is business confidence?
a. A measure of how optimistic consumers are feeling about the overall state of the
economy
b. A measure of how optimistic firms are feeling about the overall state of the economy
c. A measure of how much firms think their profits will fall
d. A measure of how much firms think their profits will increase
e. A measure of how large firms' stocks are
3. What are automatic stabilisers?
a. Changes in government expenditure and taxation receipts that take place automatically in
response to the economic cycle
b. Changes in investment and consumer expenditure that take place automatically in response
to the economic cycle
c. Changes in net exports that take place automatically in response to the economic cycle
d. Changes in net exports and consumer spending that take place automatically in response to
the economic cycle
e. Changes taxation receipts and consumer spending that takes place automatically during the
recession phase of the business cycle
4. For example, automatic stabilisers mean that when an economy is in boom, taxation receipts
would:
a. Fall because less people are in employment so less people are in taxes
b. Fall because more people are in employment so more people pay taxes
c. Rise because more people are in employment so more people pay taxes
d. Rise because less people are in employment so less people are in taxes
5. At the same time government spending would also:
a. Rise because more people are in employment so the government spends less on
unemployment benefits
b. Fall because more people are in employment so the government spends less on
unemployment benefits
6. What is a cyclical deficit?
a. A budget deficit that occurs because of changes in economic growth which result in changes
in automatic stabilisers
b. A budget deficit that occurs because of government discretionary spending. This is the
deficit that remains regardless of whether the economy is in slump or boom
c. A budget deficit that occurs because of a change of government
7. What is a structural deficit?

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A budget deficit that occurs because of a change of government
b. A budget deficit that occurs because of government discretionary spending. This is the
deficit that remains regardless of whether the economy is in slump or boom
c. A budget deficit that occurs because of changes in economic growth which result in changes
in automatic stabilisers
8. What is government discretionary spending?
a. Government discretionary spending is where government spending and taxation alter due to
changes in the economic cycle
b.…read more

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The total amount that producers are willing and able to supply at a given point in time and a
given price level
13. What is Gross Fixed Capital Formation (GFCF)?
a. Total spending on capital goods not adjusted for the effects of capital depreciation, including
replacement investment
b. A measure of the total output, expenditure or income of an economy after adjusting for
changes in the price level
c.…read more

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£55 billion
3. Graphs
19. In which quarter did Gross Fixed Capital Formation (GFCF) first fall below of the previous quarter?
a. Q1 2008
b. Q2 2008
c. Q3 2008
d. Q4 2008
e. Q1 2009
20. In which quarter did Real GDP first increase from the value of the previous quarter?
a. Q1 2009
b. Q2 2009
c. Q3 2009
d. Q4 2009
e. Q1 2010
21. When did GCFC become positive again?
a. Q3 2008
b. Q4 2008
c. Q1 2009
d.…read more

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GDP
c. 3% of GDP
d. 4% of GDP
e. 5% of GDP
26. UK public sector borrowing first started to rise again (after 2005) in:
a. 2006-2007
b. 2007-2008
c. 2008-2009
d. 2009-2010
e. 2010-2011
27. Which area of UK government expenditure is highlighted?
a. Education
b. Welfare
c. Defence
d. Debt interest
e. Law and order
28. Which Figure shows UK Real GDP and GFCF from Q2 2008 to Q2 2010?
a. Figure 1.1
b. Figure 1.2
c. Figure 1.3
d. Figure 1.…read more

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Figure 1.1
b. Figure 1.2
c. Figure 1.3
d. Figure 1.…read more

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