1. What are goods provided by the government for people who are deemed to need them called?
- Positive externalities.
- Negative externalities.
- Merit goods.
- Demerit goods.
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2. A multiple effect occurs when an initial change in government spending leads to a larger change in the level of
- national income.
3. Which one of the following is a measure of productivity?
- the annual percentage increase in production.
- output divided by employment.
- the quantity of capital equipment used divided by its price.
- the total amount of output produced each month.
4. Good X is an inferior good. A rise in consumers' income is likely to lead to:
- A rise in demand and an increase in market price and quantity sold.
- A fall in demand and an fall in market price and quantity sold.
- An expansion of market supply following an increase in demand.
- A fall in demand and an increase in market price and quantity sold.
5. When an economy operates on its production possibility frontier (PPF), it is
- satisfying all the economics wants of consumers.
- productively efficient.
- not producing demerit goods such as cigarettes.
- maximising the profits of producers.